Retirement Planning - Redefined

Inside the Advisor’s Office: What People Are Actually Concerned About

Ever wonder what other people talk about with their financial advisors? A new survey of nearly 400 experienced advisors reveals the biggest concerns, challenges, and financial goals their clients are facing today. From retirement planning to healthcare costs to working longer than expected, we’re breaking down the key takeaways and how they compare to what we see in our own client conversations.
 
Helpful Information:
PFG Website: https://www.pfgprivatewealth.com/
Contact: 813-286-7776
Email: info@pfgprivatewealth.com
 
Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.
 
 
Marc:
Ever wonder what people are talking about with their financial advisors? Well this week on the show we're going to discuss a new survey of nearly 400 experienced advisors revealing the biggest concerns, challenges, and financial goals that their clients are facing. We'll see how that compares with what the guys see here on the show. Let's get into it this week on Retirement Planning - Redefined.
 
Welcome to the podcast, everybody. Thanks for hanging out with John and Nick and myself as we talk investing, finance and retirement. And guys, we're going to share this survey. We'll put a link into the show descriptions as well for folks that want to check it out, but want to run some of this information past you guys and see does that correlate with what you're seeing, do you think it's accurate, not accurate, and just spitball and talk a little bit about some of the stuff out here.
 
The survey was done of nearly 400 experienced advisors all with around 20 years or more of a business, practicing business, so interesting. They didn't really say exactly the age bracket of all the people they were talking to, so there could be some folks that are not necessarily retirement age. They could be younger as well as older, but I want to run down some of this stuff and just get your guys' take on it.
 
How you doing this week, John?
 
John:
I'm doing well. Daylight savings is messing with me a little bit, but I'm adjusting pretty well. And one of my kids, actually both my kids, they're testing for an honor belt in karate.
 
Marc:
Oh, nice.
 
John:
So they're excited.
 
Marc:
They're going to whoop on you. Be careful.
 
John:
It's funny you say that. They're running around the house kicking me now. It's like I wanted to get them into some self-defense stuff, but now I'm getting kicked.
 
Marc:
So now you got to walk around with some pads on.
 
John:
Pretty much.
 
Marc:
Make sure you're not getting beat up too much. Very cool. Well watch the shins, man. They'll get you in the shins.
 
Nick, how you doing, buddy?
 
Nick:
Good. We're staying busy.
 
Marc:
He's like, "Good." Well, let's break this down a little bit, guys.
 
John:
That's the sound of a guy that's in the middle of planning a wedding.
 
Marc:
Right? That's what I was just thinking. He's like, "I got to make another decision. I don't want to make a decision." Let's jump into this and we'll see if we can make this easy for you this week, Nick.
 
So seeking out a financial advisor, the first part of this survey, advisors in the survey said 52% of their clients have sought out financial advisors to help with the retirement planning. About 34% surveyed were just looking for somebody to build wealth with. And in an era where everybody can call themselves a financial advisor, does that strike you as interesting? What do you guys think about that, 52% looking for retirement planning versus 34 just looking for some sort of wealth building, whoever wants to start?
 
John:
Yeah, those numbers seem accurate to me. Well, I guess I'm a little surprised it's not more looking for help with retirement planning.
 
Marc:
Okay.
 
John:
I'd say the majority of our clients are retirement planning based, "Hey, I want to make sure my plan's good. I want to make sure I don't outlive my money." As far as building wealth, that does come up quite a bit, and Nick will jump in as well, but I'd say most of our clients are looking for retirement planning and just making sure they're on track and making sure that they're making the right decisions.
 
Marc:
And it's two different mindsets too, right, Nick? I mean, so you need to decide what it is that you're looking for. I mean, not to say that you couldn't work with a retirement planner who also can help you with some of the wealth building, but it is a different skillset as well. If you're just looking for someone only to help you build the wealth, that's a little bit easier, I would think.
 
Nick:
Yeah, and I would almost, if I were to say maybe put that in other words, we talk with people at the three phases of money as far as their life goes are accumulation or growth, distribution, taking their money in retirement and then transfer when they leave money. And so I would say from that initial, that wealth building, that's most likely accumulation focused. And because so many people accumulate their money while working in their 401(k)s and that kind of thing, I think it tends to be a little bit of a different conversation and it's those people that as you get closer to retirement. So without having ages, it does make it, the numbers are interesting, and I agree with John, I would've thought maybe it'd be a little bit higher from the standpoint of the retirement planning side, but-
 
Marc:
Well, I mean, if you're just trying to grow the money, again the market's been, obviously we haven't had a prolonged downturn, and it's been choppy here lately, but we haven't had a prolonged downturn since '08, '09, so there's a lot of information out there about saying it's a little bit easier to build the wealth. But the preservation stage, which retirement is a little bit more complicated. There's more things going on than just the portfolio.
 
But with that in mind, check this out. Over half of the survey of financial advisors said the average client asset minimum was 760,000. I found that to be good. I know different areas are going to be more or less depending on the economic state of the area, but when you often hear that people aren't doing a very good job saving for their retirement future, three quarters of a million dollars is not bad.
 
Nick:
It's definitely interesting to see the numbers and how they've changed over the last five to seven years where, and you mentioned it earlier where we've had a long prolonged period of time with the market going up, and so there's quite a bit of people meeting with us or ending up with more money than they had thought that they would or that sort of thing. There's a little bit of concern with that that only lasts for so long and that there's some correction and all that kind of stuff to happen. But absolutely, definitely that puts most people in the wheelhouse of where they need to be to have a successful retirement.
 
Marc:
I mean, it's not bad. John, do you guys have a minimum? I mean, I know different advisor firms do different things. You can't service everybody. There's only so many hours in a day. So you'll hear something where somebody says, "Well, we work with people with 250,000 who have saved or more in assets," or some or a million or whatever. Do you guys have a breakdown?
 
Nick:
We don't have a set minimum that we advertise or market.
 
Marc:
Okay.
 
Nick:
I would say that the majority of the people that meet with us tend to have what many institutions have as their minimum. So in other words, a lot of places will tell people, like you referred to that, they're looking to work with clients that have 250,000 or more just from an efficiency standpoint of trying to make sure that they can service their clients and that sort of thing, and so we end up above that with most clients. But the reality is, is that the conversations that we have with clients are really we don't keep that rule set in stone because for us, it's more of a relationship-based.
 
Marc:
Individually based kind of thing? Okay.
 
Nick:
Yeah, and really it's something we're looking for people that are serious about planning. I would say if you were to draw a line between what we were talking about earlier where a growth or retirement planning in a more broadly focused strategy, so they're focused on that. They're serious about it. We reference like, "Hey, we don't want to convince you that you needed an advisor. We want you to know that you need one and we want to interview for the job," kind of concept.
 
Marc:
No, that makes sense because I mean if you're giving suggestions and someone's not willing to take them, you're just wasting each other's time versus... Yeah.
 
Nick:
Exactly, and we found that that'll waste more time than in theory working with somebody that maybe isn't where they're going to be yet. And also-
 
Marc:
It needs to be a reciprocal relationship.
 
Nick:
For sure. Communication's super important for us because we've also found that we've had people come in that maybe are under that 250, but their parents are wealthy and they ended up being a teacher or something that maybe didn't allow them to save as much money as some sorts of jobs, and they're going to inherit money and they need assistance that way. So I'd say we're pretty comfortable with our process and how we approach that sort of thing and really look for it on a relationship basis, communication basis, and how we all get along.
 
Marc:
That makes sense. And it's got to be a two-way street. I mean, when we do the podcast, it's not designed to turn every listener into a client if they're not already a client, but it is designed to say, "Hey, if it's the right relationship field going both ways, then we're happy to help if we can." That's pretty cool. So that's a good way of looking at that.
 
John, check out some of these top concerns. Let me know what you think here. So no surprise, number one, outliving their assets, 38% of the people surveyed. That's pretty much always number one, right? Outliving your money.
 
John:
Yeah.
 
Marc:
31%, generating reliable income streams, a pretty high number as well.
 
John:
Yes.
 
Marc:
Okay. Then it drops off to a pretty stark, down to 12% for a future stock market crash. Now with some context here, this survey was completed at the end of last year, so it was December of '24. Do you think that number's gone up recently?
 
John:
I would willing to bet that number's gone up. I think we were talking about the market, the last real big downturn was '08, and I think in the last 10 years, we've only had two years of the market being down, the S&P 500. I think it was, what, '22 and 2014, I believe.
 
Nick:
I'd almost say that's a leading indicator that there's going to be, it's one of those things. Once people get that comfortable, that's usually when it comes.
 
Marc:
I mean, it's been a while, right? So because nobody's worried about it whenever it's riding high. We only seem to worry about it whenever we're in the middle of it falling a little bit. But the one that really surprises me is all the way down to 8% for healthcare costs. Now if you guys are focused more on helping people with retirement planning and strategies, that to me, again depending on the ages of the people that answered this survey, healthcare costs at 8% seems awfully low because it's pretty costly, and we need to be having those conversations when we're, especially as we're getting older.
 
John:
Yeah, for sure. This one, it is very important, and I think it's same thing we're talking about the stock market where it's been doing well. And when you're healthy-
 
Marc:
It's great.
 
John:
...you think you're going to be healthy for a long time.
 
Marc:
You don't think about it. Right, exactly.
 
John:
You don't think about it all. It's back of your mind. I'll tell you where we see a lot of people concerned about it is if they had to do some care for their parents. Then it becomes top of mind of like, "Hey, this was a lot that I just went through." And taking care of them or seeing, whatever, if they have to go into a facility, and then in turn that's where we see the most of our clients that are concerned about healthcare costs is if they had to take care of a loved one.
 
Marc:
Nick, according to the survey on that topic, advisors that were surveyed in this, were saying that clients should be more concerned about healthcare costs at around 54% unanticipated healthcare cost. Will you agree with that as well? Because I mean, obviously it comes out of the blue, it can totally derail the whole strategy.
 
Nick:
Yeah, I think part of that is, from an advisor perspective, the whole concept of long-term care, obviously I'd say many advisors have a good grasp on long-term care, but I think it's become increasingly difficult for advisors to help clients plan for that with insurance or certain products that are out there. If we went back 10 years and from, let's just call it 2015 back through maybe 2005, that was the golden era per se for clients to be able to secure a reasonably priced policy from a long-term care perspective. So I think maybe that ties into the concern that advisors have is that at the end of the day it's a really expensive problem that clients can have, but it's also an expensive solution that a lot of clients are reticent to spend on something that may not be an issue, especially in a state like Florida where all of the insurance, people have serious insurance fatigue here.
 
Marc:
Oh, I'm sure.
 
Nick:
So it's a funny thing. The one time I actually answered a soliciting call earlier this morning was from State Farm calling me to, and they asked me if they could shop my car insurance for me, and I said, "Sure, let's try it." And sure enough, it was going to be $1,400 a year more than what I'm currently paying.
 
Marc:
Thanks for the help.
 
Nick:
And she laughed too, and she's like, "Well, can I call you in six months?" I was like, "You can try."
 
Marc:
You can try.
 
Nick:
I don't think you guys are going to come down that much. And so it's just crazy with what people are paying here. And so I think, long story short, I think that really ties into it as well for advisors.
 
Marc:
And I'll hit you with this last one, John. I'll let you start and then I'll let Nick jump in if he wants to. And again, this survey was completed at the end of last year, so you can't take the current market downturn into this conversation. But according to the survey, an average of 63% of clients age 55 or older intended to work to 65 and beyond. 63% of people wanted to continue working up to 65 or beyond, yet only 30% of those clients are actually still doing it. So I guess my question is, does this surprise you that people want to keep working longer? And if so, what are some of the main reasons why you guys are seeing people want to work into their older ages?
 
John:
It doesn't surprise me. I think with the shift really since COVID of being able to work remote, I've seen a lot of people that sit there now thinking like, hey, I work from home. I can travel still and log in. And it's given them a comfort of just saying, yeah, I'm making good money. I can continue to do this.
 
Marc:
Feather than nest some more, right?
 
John:
Yeah, so it's just building up the nest egg and allows them maybe to feel comfortable doing some more travel that they otherwise maybe wouldn't have felt so comfortable doing. We talked about the fears of outliving your assets, so I've seen a lot of that. And then there's a lot of studies out there saying, just keeping sharp of mind. So I've seen that where people are like, "Hey, I don't want to retire because I want to stay active. I want to have a purpose and continue to do things." So I think I'm not surprised by that number.
 
Marc:
Interesting.
 
John:
Because we're having more conversations of people wanting to work longer because they enjoy what they're doing. And with Zoom, it's become very easy to continue to work longer.
 
Marc:
Well Nick, I'll give you this last piece here. 48% of those people feel like they don't have enough saved to live on through retirement. I mean, you're talking about half. So half of the people surveyed don't think they have enough, so that sounds like it just comes back to just not truly having a plan or even really knowing what it is that you've got. They've probably never sat down and really pulled this stuff together so they don't feel confident.
 
Nick:
Correct. I think you nailed it there. The uncertainty of not having a plan and not knowing and understanding what things look like really oftentimes causes procrastination, and then all of a sudden it's 5, 7, 10 years later and there could have been a couple of small tweaks or a couple of small adjustments. I mean, in reality, there's been so many times when within 30 minutes if John and I meeting with somebody the initial time, we can tell three to five things that they could do that wouldn't have a significant impact on their life, but would have a significant impact from a positive perspective on their overall planning. And so whether it's informing themselves and holding themselves accountable or working with an advisor, which we have found, and there's been a ton of studies that have found that having that partner to help guide them through the decision-making process, that there's significant value there and the average rates of return and all that kind of stuff show that because of the decision-making.
 
Marc:
Well, think about what you're going through with the wedding planning stuff. So there was a thing a couple years ago we were talking about, some of the most stressful events we can do in life, one of them was planning for a wedding. One of them was planning for retirement, right?
 
Nick:
Yeah.
 
Marc:
There's a lot of decisions to be made. And so having somebody to lean on I think goes a long way into removing some of that stress because it does get overwhelming. And at some points you're just like, ah, screw it. I don't even know what to do anymore. So being able to talk with guys like yourselves and say, "Okay, look. Here's some thoughts we had," or, "Here's what we were afraid of," or whatever the case is, it gives you that sounding board to bounce some ideas off of and maybe get some reassurance.
 
Nick:
Yep, fully agree.
 
Marc:
Yeah, and so are you having that same problem from the wedding standpoint?
 
Nick:
Right now we're interviewing planners-
 
Marc:
There you go.
 
Nick:
...and the prices have gone up, so it's-
 
Marc:
But you're looking for help, right, because it's a lot.
 
Nick:
Yeah, absolutely, absolutely.
 
Marc:
John, you don't want to be the wedding planner?
 
John:
No, no. I did that 12 years ago-
 
Marc:
I got you.
 
John:
...and I want no part of that.
 
Marc:
I got you. Well, all right, guys, good conversation as always. Thanks so much for hanging out. So at the end of the day, I mean you find these surveys are pretty interesting. And I think a lot of this stuff comes back fairly similar each time, is that people are looking for some assurance. They're looking for some clarity in some of these situations, so that's the point of running through the planning process is finding out what do you got, where do you stand and how's it working for you, and do you need to make some changes?
 
Often people feel like we're going to have to do some major overhaul, and it scares them. But a lot of times when you run through the planning process, many people are in better shape than they realize. You just need some tweaks here and there. So if you want to have those conversations for yourself, reach out to John and Nick and get started today at pfgprivatewealth.com. That's pfgprivatewealth.com. Get yourself onto the calendar for a consultation and a conversation.
 
And don't forget to subscribe to us on Apple or Spotify, whatever podcasting app you like using. Retirement Planning - Redefined is the name of the show with John and Nick, and we'll see you next time here on the program. Thanks, guys. Take care of yourself.

April Fool’s: Beliefs That Fool Retirement Savers The Most

April Fool’s Day is all about jokes and pranks, but when it comes to retirement planning, getting fooled can cost you real money. Today, we’re uncovering the beliefs that fool retirees and pre-retirees into making bad financial moves.
 
Helpful Information:
PFG Website: https://www.pfgprivatewealth.com/
Contact: 813-286-7776
Email: info@pfgprivatewealth.com
 
Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.
 
 
Host:
April Fool's Day is all about jokes and pranks, but when it comes to retirement planning, getting fooled can cost you some real money. So we're going to talk about that. A little early for April Fool's, maybe, but we're going to still talk about it this week here on the podcast. So let's get into it.
 
Hey, everybody, welcome to the show. Thanks for hanging out with us here on Retirement Planning Redefined, with John, and Nick, and myself, as we talk investing, finance, and retirement. And we're taping this a couple of weeks before April Fool's Day. It should drop right around there, but we'll have a conversation with the guys. What's going on, Nick, buddy, how are you?
 
Nick:
Good, good. Staying busy.
 
Host:
Yeah. Well, that's always good. Good stuff. John, I know you and I were just chatting before we got rolling, we're worn out. But you hanging in there?
 
John:
Yeah, doing all right. And don't let Nick fool you, he's got a lot going on.
 
Host:
He's got a lot going on.
 
John:
You tell him the news.
 
Host:
He did. Yeah.
 
Nick:
John's favorite topic. Got engaged a little over a month ago.
 
Host:
Awesome, awesome.
 
Nick:
Yeah, in the full throws of wedding planning, which is, of course, extremely exciting.
 
Host:
That you're doing a little of, or a lot of, or zero of?
 
Nick:
I would say some impact. My fiance is originally from Columbia, and the way that they do things for weddings there is a lot different than here.
 
Host:
Okay, cool.
 
Nick:
So yeah, so there's a little bit of translation from that perspective.
 
Host:
Nice, nice.
 
Nick:
Yeah, that's interesting. But it'll be good.
 
Host:
Very cool. Nice.
 
Nick:
It'll be good.
 
Host:
Well, congratulations. Very, very cool.
 
Nick:
Thank you. Appreciate it.
 
Host:
All the best to the newlyweds. Very good stuff. We won't pull any April Fool's Day pranks on you then, in that regard. We'll just take to the financial stuff here this week.
 
So the idea, guys, being that, look, the media is nonstop, the onslaught of social media, internet, whatever. There's always something out there. And you just want to make sure you're vetting some stuff before you... Fool's gold, right? Before you just jump into something and maybe make a mistake.
 
So we'll start with tax conversation. So as at this time that we're taping the podcast, we don't know if the TCJA will get extended or not. Odds are fairly good, we'll see how the year plays out. But if they don't, they expire at the end of the year, the current tax code that we're under.
 
So are you taking that information and maybe thinking, hey, I don't have to do any tax planning for the future, because maybe the taxes are going to stay really low like they have been historically? Or are you being proactive and saying, "Well, there's a chance that taxes could still go up, because we owe a lot of money"? So whoever wants to jump in, get started on that. But what do you think about the tax situation and not fooling yourself into just thinking everything's going to stay exactly the same?
 
Nick:
Yeah, I can start with this one. So one of the things that we really emphasize with clients and people that we work with is, especially when it comes to taxes, that the best thing that you can do is to expect change. So whether it's something changing at the end of this year, a couple years from now, whatever it is, the goal is to allow yourself to be adaptable to whatever's happening.
 
So the easiest way to do that is to have different types of accounts. So to have Roth accounts, pre-tax accounts, and more of a traditional brokerage account where we can factor in capital gains instead.
 
But even more specific, when it comes to the whole concept of potentially underestimating taxes, there's still a lot of confusion for people on how much of their social security is going to be taxable, or include-able in their taxable income. I had a conversation with my parents about it, and I had to convince them that I was correct and knew what I was talking about after 20 years, because of a way that something that they heard on the radio or saw on TV was phrased, made it very confusing to them. So just-
 
Host:
Sure, I mean, there's the conversation that they might get rid of it, but they haven't done it yet. So you still got to be planning for stuff.
 
Nick:
Yeah. But even outside of that, the way... It was interesting, and I do want to bring it up now that I remember it.
 
Host:
Sure.
 
Nick:
The way that it was being marketed was that the concept of, "Hey, most people don't know that your social security, how much you pay in taxes on your social security will go up at age 73." And so, really, the concept of that was, "Hey, when required minimum distributions kick in, and you have more taxable income, there's a chance that more of your social security income will be include-able in your tax and how much you pay in taxes." So it was kind of a roundabout way to scare people. So it allowed us to have the conversation about, for a huge chunk of people, 85% of their social security is going to be include-able in their taxable income, at least how the law is now, and just how other types of income may impact that.
 
Host:
Oh, and that's a great point though. That really highlights exactly the point of this conversation, is that depending on how you phrase things, it's very easy to get misled by stuff. And so that's a great illustration of that, Nick. So thank you for sharing that.
 
And it definitely walks that... And that's what all these are going to do. John, like the next one around Medicare misunderstandings. So my mom's forever, she's 83, she's forever going... And my brother's now, he's over 65, so she's educating him. She's schooling him on the stuff she's been doing for a while with Medicare. And it's like, it doesn't cover everything. And people still sometimes think that, "Hey, at least I've got to 65. Now I've got this Medicare thing. I'm in good shape." And it is a great program, in a lot of ways, but it doesn't cover everything.
 
John:
Yeah, that's accurate. And a lot of people, unfortunately, don't realize that. And a big thing that, when you get Medicare age, age 65, Medicare has a lot of moving parts to it, and there's a lot of different options.
 
Host:
Oh, yeah.
 
John:
So depending on whether you go, let's say, on an Advantage Plan, if you're on Plan F, or G, you get the supplement, it's going to determine what is covered. And then, also, you want to look at, do your current providers even take Medicare? So you might be looking at it and think that you're going to be all set-
 
Host:
Great point.
 
John:
... And then you come to find out that your provider who you like doesn't even take it. So yeah, it definitely does not cover everything. So when you're doing your planning, when we do it, we always try to make sure, "Hey, this is our set price for Medicare." Then we adjust as we determine what plan the client's going to go with or help them determine what's their best option. But also, you want to plan for some out-of-pocket medical expenses for what it doesn't cover.
 
Host:
Yeah, I think she's changed her dentist a couple of times just because they don't take it anymore. They changed or whatever. And of course, dental being one of those things that people often don't realize is, a lot of stuff's not covered there.
 
John:
And prescriptions.
 
Host:
Yeah, and eye. The eye stuff is really interesting. Some of the eyeglass stuff, like going to the eye doctor for just basic optometry stuff is not covered. But then the cataract stuff, some of it was. So it's very strange. So you want to make sure you're understanding what is and what isn't taken care of there with Medicare. So that's certainly a good one as well.
 
Nick, what about the set it and forget it retirement plan strategy. When you're talking about things getting kind of mis-sold or kind of mislabeled out there, some people will be like, "Hey look, you got to get a plan together. You put stuff in there. You let it ride and you roll from there." Right? Well, some things can set it and forget it, but some things can't either.
 
Nick:
Yeah. So kind of a good example of maybe the set it and forget it concept, saw come up a little bit more in the last couple of years, where had some clients that were moving towards retirement, and they had done a good job of saving and building up the nest egg, and they were somewhat familiar with, maybe take 4% a year and I can live off of 4% a year.
 
But with rates being in that point of time where we clicked up, where they could get four to five, five and a half percent in money market CDs, et cetera, they had kind of just said, "Hey, want to shift to the sidelines, want to avoid the market. I'm just going to take my 4-5% and live off the interest." And the conversations that we had to really have were, conceptually, that'll be good for now, for the next year or two. But most likely, there's going to be a point in time within the next three to five years that rates are going to change, and that 5% might turn into 3%, or two and a half percent.
 
And even on, let's just use 2 million bucks. So maybe they could do 5% on 2 million is a hundred grand a year, good to go. Now if we shift to two and a half, 50 grand a year off of the portfolio, with their intention of trying to maintain principle, that starts to rewind a little bit.
 
And so, it's a good example of realizing how the dynamics of a plan change, and that if you're only factoring in what's happening now, or in the next short term, next couple years, that not understanding updating and adjusting your plan to current circumstances, or maybe a broader sense of what could happen, could really put somebody in a difficult position.
 
Host:
Yeah, that's a great point as well. So there's so much stuff you got to think about when you're factoring all these things in. And John, the market's been choppy. The time we're taping this, it's been a little choppy out there. So some of the tariff conversations-
 
John:
Just a little bit.
 
Host:
A little bit, or whatever is kind of making the market uneasy. But chasing and obsessing, not necessarily just over the market highs, but also high dividend stocks. So sometimes people will say, "Well, a good alternative to doing X or Y is to get high dividend stocks." What's some thoughts there?
 
John:
There's different strategies for what you're trying to accomplish. And one of the problems with this one, especially if you're going to retirement and you're thinking of, "Hey, I'm just going to have high dividend paying stocks," is that those things can change. If all of a sudden we have a recession, or the economy's not doing well, or that particular company's not doing well, guess what they could do? They could just change your dividend.
 
So if you had a plan, going back to what Nick's example, they're like, "Hey, I've got this stock. It's giving me 4- 5%," and you think you're okay. And all of a sudden some news comes out and that dividend drops, and now your whole plan just slightly changed. So with dividend paying stocks, they're not guaranteed. And depending on how high of a dividend paying stock it is, the higher sometimes could be correlated with a little bit being more aggressive and more risk.
 
So I've seen, this actually reminds me of a meeting I just had this week, where someone was in talking to a friend of theirs, and they were trying to say, "Hey, just put all your stuff in these high dividend paying rates," and all these things. And I'm looking at it like, "Hey, this is pretty aggressive. You're getting a good yield. But if we have some type of pullback, not only will your dividend potentially go down, but the value of this stock could also drop."
 
Host:
Sure. Yeah.
 
John:
So it's just important to understand what you're in and what could change.
 
Nick:
I think I'd also like to jump in on that.
 
Host:
Sure.
 
Nick:
Because I've had this conversation with some clients quite a bit. And one of the things that I tried to emphasize is that if we look over, because a lot of times the generation that's been drilled with dividend paying stocks is a generation now that's kind of entered into retirement, where they were really starting to invest in coming up through the period of higher interest rates, when dividend paying stocks perform better.
 
And frankly, if you look over the last 10, really post recession, post '09 and 2010 recession, in an environment with lower rates, if somebody was invested the last 15 years in only dividend paying stocks, then the returns that they have gotten are pennies compared to being involved in-
 
Host:
Wow.
 
Nick:
... growth related investments. Think of tech, think of the Magnificent Seven now, think of all the areas of the massive growth over the last 10 or 15 years, and there was significant opportunity cost. So the environment that we're in, where those companies were really rewarded for, the cost of borrowing was low, the ability to reinvest and grow was high. Even when you factor in stock buybacks, I mean, you had companies that were making more money in stock buybacks than they were in producing their own products. So the environment of what's happening has a significant impact on that as well.
 
Host:
That's great points, guys. So it's easy to get lulled into whatever kind of marketing, or whatever kind of news headline, or whatever the case is. So just make sure that you're not falling for it. Or at least not without vetting some things out and talking with your financial professionals.
 
So if you've got some questions, as always, you need some help, you should always run anything you hear by on our podcast, or really any other, even the big talking head shows, talk with someone local in your area about your unique situation so that you're getting some hands-on advice and conversation. And if you need some help, John, and Nick, and the team are available at pfgprivatewealth.com, that's pfgprivatewealth.com. So you can subscribe to the podcast. You can find it there. Of course, you can get some time on the calendar through the website, lots of good tools, tips, and resources. And of course, you can subscribe to us on Apple, or Spotify, or whatever podcasting app you like using.
 
So again, pfgprivatewealth.com. That's going to do it this week. Guys, thanks for hanging out, as always, and breaking it down. Congratulations once again, Nick, on the upcoming nuptials. And John, buddy, have a great week. We'll see you next time here on Retirement Planning Redefined.
 

Social Security Claiming Tips for Diverse Family Situations

Social Security claiming strategies can vary greatly depending on family dynamics. This episode explores how different family situations, such as those with a stay-at-home spouse or a blended family, can impact when and how to claim Social Security benefits to maximize your retirement income.
 
Helpful Information:
PFG Website: https://www.pfgprivatewealth.com/
Contact: 813-286-7776
Email: info@pfgprivatewealth.com
 
Speaker 1:
PFG Private Wealth Management LLC is an SEC registered investment advisor. Information presented is for educational purposes only, and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk and unless otherwise stated are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.
Speaker 2:
The rules of retirement have changed. No longer can most of us rely on Social Security or a single pension to fund our futures. We're living longer and retirement doesn't just last a handful of years anymore. Instead, you might stay retired for 20 or 30 years and maybe even more. We need to look at retirement through a new lens with fresh eyes, with a new approach and plan of attack. Here to answer the call, our financial advisors, John Teixeira and Nick McDevitt of PFG Private Wealth Management serving you throughout the Tampa Bay area. This podcast is Retirement Planning - Redefined, and it starts right now.
Marc Killian:
Time for another edition of Retirement Planning - Redefined with John and Nick, financial advisors at PFG Private Wealth. Make sure you subscribe to the podcast on whatever podcasting app you like using. Just type in Retirement Planning - Redefined, or find it online at pfgprivatewealth.com. That's pfgprivatewealth.com, and while you're there, you can book an appointment with the guys right there at the top of the page. Just click on the little tab and get started today. We're going to get into Social Security conversation this week with the guys, some claiming tips for family situations, different kind of family situations that are out there before we get rocking and rolling. Nick, how are you doing, my friend?
Nick McDevitt:
Doing pretty good.
Marc Killian:
Yeah, hanging in there?
Nick McDevitt:
Oh, yeah. Slightly enjoying the cooler weather, but I always enjoy hoodie weather, so I could use a couple more degrees, but.
Marc Killian:
Okay.
Nick McDevitt:
But not too bad.
Marc Killian:
Not too bad. And John, how are you doing with the herd down there? Everybody doing all right?
John Teixeira:
Yeah, everyone's good. Everyone's trucking along. Yeah, my daughters are in karate, so they're enjoying that.
Marc Killian:
Oh, nice.
John Teixeira:
And debating what the next step is for one of, actually, they run around kicking me all the time now.
Marc Killian:
Yeah, they're going to ninja flip you all over the house.
John Teixeira:
Nice. I'm trying to get my youngest one into flag football so I just bought her a football and throwing it.
Marc Killian:
Very nice.
John Teixeira:
My wife's like, "No, no, she's doing softball."
And I'm like, "Whatever."
Marc Killian:
Nice.
John Teixeira:
So we're trying to get her into some sports here, so it should be fun.
Marc Killian:
Good, good stuff. Good stuff. Well, since we're talking about families, let's talk about the Social Security breakdowns on some things. Claiming strategies vary, obviously from dynamic to dynamic. In this episode, let's just run through some stuff. I guess we'll start with the broad view, fellas. Social Security claiming strategies, there's a lot of it. I mean, it can get a little overwhelming, which again is important to work with somebody who has some experience in this. Whoever wants to tackle that, what's your thoughts on just the sheer number of claiming strategies that are out there?
John Teixeira:
There's a lot. There's a lot of them, but it really boils down to a few that you end up doing. I think the most important thing is to understand your current situation, whether it's the discrepancy of what the income's going to be for each person. If you're filing jointly or you have two people taking Social Security and understanding what the need is at the time. Do you need income right now? Can you hold off? But there is a lot of different options to pick from. The best thing is to review what makes sense based on the plan, and then also at this current time what you have going on.
Marc Killian:
Yeah, I think a lot of people view it as, well, we've got this collection. We've got a 401(k) and this, that, or the other that we've personally saved. Oh, and Social Security versus maybe looking at them all together holistically in one overall strategy. It should be thought about and we're going to talk about that in the way you set up your income structures. Nick, I guess I'll let you take over and get this first one. Let's look at it from a single income household consideration. We don't see this as much anymore, but maybe it's just one person that goes to work and the other person stays at home, which is totally fine, but what's some things to consider in that unique situation?
Nick McDevitt:
The timing of the benefits are super important. Number one, the golden rule in retirement planning or financial planning is it depends. From the perspective of I think one of the biggest drivers in a single income household is going to be age difference between the two, and that has the biggest impact on the claiming strategy. Ultimately, any of these Social Security decisions come down to their function of other assets and the impact of the timing of the Social Security benefits and how that's going to take into account. But if we were to pick one thing from the standpoint of survivor benefits is a good example. A lot of people are under the impression, or I should say the feedback that we've gotten from many people is not having a good understanding of how survivor benefits work. The reality is that survivor benefits are when one passes away, the surviving spouse gets to the higher, the two benefits, the lower one goes away.
Marc Killian:
Right.
Nick McDevitt:
Oftentimes obviously if it's a single income household, the person that hasn't worked, their benefit's going to be lower, it's going to be half or even less depending upon when they take it. We'll go through and use, we have some calculators that we'll work with with clients, put their specific situation in there, then use those numbers and overlay them with the plan to help them try to figure out the most efficient way to do it. We always say to them that there's the top financial strategy and then there's the we have to try to balance that with the I want my money and I want it now strategy.
Marc Killian:
Right.
Nick McDevitt:
When it comes to Social Security, there's something to it from the perspective of people putting in the money over years and really wanting to get access to their money quicker. That's how we go into most of these strategies is overlaying it with the plan and looking at how it's going to work.
Marc Killian:
Well John, let me ask you a couple of follow-up questions on the single income household side. I think there's some confusion too. I typed this in the other day when I was putting these together and I saw this, I think it was, I don't know, Reddit or something feed where people were back and forth and they didn't seem to, there was a lot of misunderstanding about if you didn't work, could you get Social Security?
People were saying, "Well, you have to work the 40 quarters in order to qualify for Social Security," which that's accurate for your own.
However, and then somebody else would follow up and go, "Wait a minute, my grandmother who never, ever had a job gets Social Security. How is that possible?"
I think there's confusion out there that if you're a single income household, if you've never worked, you can claim against your spouse, correct? But they have to have already activated it for it to start, is that correct?
John Teixeira:
You get the spousal benefit. Correct me if I'm wrong here, but I believe you have to be married nine months in order to receive that.
Marc Killian:
Yeah, correct.
John Teixeira:
In reality, most people will get that as a spouse.
Marc Killian:
Sure.
John Teixeira:
I had one situation actually where someone got married, they didn't qualify and the spouse died after eight months.
Marc Killian:
Oh, wow.
John Teixeira:
So they did not qualify anymore. You do have the spousal benefits, which is half of the earning or the qualified spouse's, what they call full retirement amount.
Marc Killian:
And they have to turn it on first, right? That's a bit of a sticking point. If you're the worker, you have to claim Social Security before the spouse who never worked can also get their half, correct?
John Teixeira:
Yeah, Marc. That is accurate. To receive a spousal benefit, the spouse that is qualified has to be drawing on benefits. The person receiving the spousal benefits has to be past 62. The big confusion on this was in the past, you could do some strategies like file and suspend where the person didn't have to be drawing it just yet, so you do some strategies. But they closed those loopholes about six or seven years back, which ultimately was a loophole that needed to be closed to help the longevity of the program but a lot of people weren't happy because it was probably the best strategy out there to use. But good news is it helps longevity of the program. Bad news, you can't do it anymore. But some of the confusion comes into play where people that have already done the file and suspend are grandfathered in.
Marc Killian:
Gotcha.
John Teixeira:
Circling back to the spousal benefit, spouses are entitled to half of their spouse's full retirement benefit. They can drawing at 62, and their spouse has to have started drawing on it themselves.
Marc Killian:
Yeah, gotcha.
Nick McDevitt:
And if they do receive the benefit, if the spouse that hasn't worked and is receiving the spousal benefit, if they take it before their full retirement age, then there is a reduction.
Marc Killian:
There's a reduction as well, right.
Nick McDevitt:
There's a function there. The only other thing I want to mention for the single earner is, single income is if somebody was married for at least 10 years and then are divorced and not remarried, they are eligible to, and maybe they never got their 40 quarters, they are still eligible for a spousal benefit.
John Teixeira:
To jump on that, because this has come up quite a bit with clients, if you're divorced and you're eligible for spousal benefits, you do not have to wait for the person to be drawing. As long as they pass the age of 62, you can draw. Part of that is because you might have some vindictive spouses that are waiting to draw to make sure their ex doesn't get the spousal benefits.
Marc Killian:
Well, and we're going to talk about that in a minute as well. There's a couple little things, little caveats there. To our point, kicking this off, there's a lot of nuance to Social Security. We're going to try to keep it high level a little bit and not get too confusing. Again, it's important to talk to somebody, but those are some basic things to think about from that single standpoint.
Let's go to the dual income households, which is most people, guys. John, you talked a little bit about file and suspend and while it's no longer an actual strategy, what I know a lot of advisors often talk about with their clients who have dual income is if one person is making more, then maybe you're letting that one grow to 70, right? To the max out. And then the person who's maybe making less, especially if they're the same age, maybe then you're looking at turning that on earlier, whether it's full retirement age or even 62 depending on the money needs. That's a workaround I suppose, to the file and suspend a little bit. That's some things to think about. So what's some other things to think about and dive into wherever ever you want on dual incomes there?
John Teixeira:
Again, rule of thumb is just overview versus individuals, but it does make sense to always suspend the higher benefit, whether if you're dealing with a survivor benefit, there's some strategies. You have the dual income spousal benefits, you want that extra compounding on the higher amount is basically why you want to do that.
Marc Killian:
Right.
John Teixeira:
Another strategy for that and why you might want to delay the higher benefit is the survivor benefit is going to be higher. You can in essence defer someone's benefit till age 70, and if they were to pass away, the survivor benefit now has that increased amount so that is one option you could do. As you mentioned here, you could take a lower benefit earlier, let the other one go. If you have two working spouses, but let's say someone's benefit isn't as high as their spousal, you could look into someone taking their own benefit at 62 and then switching to the spousal later. There's definitely a lot of different things you can do. And a reminder of what Nick said, anytime you take early, you are going to get a reduction of benefits.
Marc Killian:
Yeah, 30% currently, right.
John Teixeira:
Yeah.
Marc Killian:
That's a big haircut-
Nick McDevitt:
Depending upon your full retirement age.
Marc Killian:
From your full retirement age, yeah, it's a big haircut, 30%. To your point earlier guys, when you're building a strategy, because I guess Nick, part of this is looking about where are you taking money from, right? You've got your 401(k), you've built up your personal, then you got your Social Security, and it's like, okay, when are we turning on what and where so that we can maximize this? It's like, which horse are you riding? The one you brought or the one the government brought kind of thing.
Nick McDevitt:
This might be a little bit too detailed, but really, what we do from our standpoint as an advisor is we use the withdrawal rate as the test to figure out. When we look at the overall portfolio and we go through the expenses and we figure out how much income a client's going to need on an annual basis, let's say that delaying Social Security is going to force them to take a 10% withdrawal rate. For three years, they're going to have to take out 10% of their money out of their portfolio a year to cover expenses to delay. That number's probably too high. For most people, that number's probably too high.
If it's something around a max of a seven or eight, and it's only going to be for a couple years, depending upon the size of the portfolio, that can make sense. But when there's just too much pressure on the portfolio to perform, then oftentimes just at least getting one of those Social Security benefits and that's why staggering the two oftentimes makes sense. It's like, okay, well if a 10% withdrawal rate is what's needed, then if we can reduce that down to a seven for a couple of years by taking one and then drop it closer to a four and a half, five after a couple more years and stagger it, that's the ideal.
Marc Killian:
Gotcha.
Nick McDevitt:
It really is a function of portfolio like the nest egg number, the expenses and what we need to take out to cover those expenses and what the gap that Social Security benefit's going to provide.
Marc Killian:
Gotcha, okay. Yeah, so I mean, again, there's really a lot of nuance to figuring out. Most of us are going to probably fall into this dual income household planning strategy. You want to make sure that you're working with someone to just maximize things based on what you've built yourself, plus what we're going to get back from Social Security. Can we talk about a lot of money over time?
John, you talked about ex-spouses earlier, so let's talk about special considerations for blended families or people who have gotten a divorce and remarried or whatever. I'll throw this out there as well. So my mom found, and Social Security, people that work there, they're not supposed to, typically they're not going to help you with their claiming strategies, right? They're going to give you the options available for you, but it's not really their job and they're not really supposed to be diving into the weeds. But I will say, that said, there was a lady that helped my mom. She was asking her a question, and she informed her, and a lot of people don't know this, that you could claim on an ex-spouse, right?
To John's point earlier, and so she found out she could actually get a higher benefit, she's in her eighties, by claiming from her first husband who she hadn't been married to in a very long time. But there are some caveats and rules to that. It could be something that you consider doing in your claiming strategy as well, especially if you're a widow or you're single. You have to be single obviously in order to do that, that's one of those caveats. But talk to me a little bit about some of that stuff. It was interesting, she found out she could get more money. And to your point about the vindictiveness, they don't ever know.
So when you claim, they don't find out, they don't get to come to your house and go, "You're claiming against my Social Security." They don't even know.
John Teixeira:
Yeah. That's something that comes up where I guess some misinformation or I don't know how this comes up, but it's somewhere out there where I've had clients ask, "Hey, is my ex-spouse drawing on my Social Security going to affect mine?"
The answer's no. What you just said there, you would never know when they draw on your Social Security, it's not going to affect yours whatsoever. And vice versa, where it's like, "Hey, will they know when I start drawing my spousal benefit?"
Marc Killian:
Yeah, can I stick it to them? Like, "No."
John Teixeira:
No, you cannot. And then one thing you mentioned earlier, Marc, when you were going through that is you can draw an ex-spouse as long as you are not remarried.
Marc Killian:
Correct. And I think you had to be married 10 years, right? To the prior person. Yeah.
John Teixeira:
Yeah, you have to be married 10 years and you cannot be remarried. I've had situations where people did not remarry to take a spousal benefit. They just let it ride and said.
Marc Killian:
Mom being in her eighties, she was like, she's not getting remarried anyway. But she was like, "Huh, I didn't know that."
To your point about not knowing, one of my siblings was like, because we're half siblings, "Well, that's not cool. She's drawing against my dad's."
I was like, A, he's never going to know. B, actually, he's never going to know because he's passed away anyway, right? It's a weird little loophole, but it is one that could be beneficial, and a lot of times I think it does benefit widows sometimes who maybe have been, maybe their second marriage and then that person passed away. It is something to consider if they had a prior husband who maybe made more money. It could be an option to look into, but there's some rules and there's some things, so you want to make sure you're talking with somebody about that.
John Teixeira:
Yeah, the most important thing is let's say you are in that situation where you have an ex and currently doing this right now, you have to go to Social Security and provide them with the information so you can determine what their benefit actually is. And if you have multiple exes that qualify for you get to pick and choose whichever one's higher if you're going to be doing a-
Marc Killian:
But you do have to have the paperwork to your point, yeah. You have to show-
John Teixeira:
You have to have the paperwork and everything like that.
Marc Killian:
Yeah, to show.
John Teixeira:
Definitely there's a lot of options, information out there, and it's important to do your due diligence. And if you do call Social Security, and we're going to say this every single time we do a Social Security podcast, sometimes they give you bad information, unfortunately. It's important to make sure you're working with the qualified professional that knows it, and you might want to call multiple times to confirm what you're hearing.
Marc Killian:
Well, speaking of, that might be a good time to bring up the fact you guys got something going on. What's going on there? You got an event or a class or something?
Nick McDevitt:
Coming up at the end of the month in January, a fair amount of our clients have come to us through the classes that we do around at different educational institutions. But starting on January 30, it's a two night course, so two and a half hours on the 30th, and then two and a half hours on the following Thursday. And then concurrently, we also run day one of the course on the 4th and the 11th of February.
Marc Killian:
February, okay.
Nick McDevitt:
It'll be at Pasco Hernando Community College, the Porter Campus up in the Wesley Chapel area. We've got clients that originally went to the course and then sometimes like to go back and freshen up. We have other people that have come to us, whether it's a referral or heard the podcast or whatever, and they find out that we do the class and they like to join. So more than welcome, just reach out to us if it's something that you're interested in.
Marc Killian:
What's the best way to go about doing that? Just go through the website or call a number?
Nick McDevitt:
I would either call our office, (813) 286-7776. Or they could email either John or myself, it's nick@pfgprivatewealth or john@pfgprivatewealth.
Marc Killian:
And again, that number if you need to, folks, is (813) 286-7776. Or email John or Nick and then @pfgprivatewealth.com. All right, that's going to do it for this week on the podcast. Thanks so much. So yeah, great. If you'd like to attend that event, I mean at the time this podcast is happening, you want to jump on the February one. But definitely reach out to them ASAP, don't delay and get yourself in there because a lot of stuff that goes into Social Security. Make sure, as John said, that you are talking with the professional who can help you with this and you can reach out to them at pfgprivatewealth.com or the information we just gave. Check the show notes below for links and information that way as well. Don't forget to subscribe to us for future episodes of Retirement Planning - Redefined with John and Nick from PFG Private Wealth. We'll catch you next time. Thanks guys.
 

New Year, New Me: How To Change Your Money Attitude In 2025

As we kick off 2025, a lot of people consider what they want the year to look like and how to put their best foot forward, especially financially. Think: “new year, new me!” To figure out what the new “you” is all about, sometimes it helps to reflect first on what you’ve done in the past and what you want to change moving forward. Today, we’ll talk about the financial decisions and habits you’ve maybe had in the past and what changes you can make this year to embrace the new you.
 
Helpful Information:
PFG Website: https://www.pfgprivatewealth.com/
Contact: 813-286-7776
Email: info@pfgprivatewealth.com
 
Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.
 
Speaker 1:
It's time once again for another edition of the podcast, Retirement Planning Redefined with John and Nick, financial advisors at PFG Private Wealth. And you can find them online @pfgprivatewealth.com. That's pfgprivatewealth.com. And we are into the new year. It is 2025, which still sounds weird to say. And we're going to do that new catchphrase in the last couple of years has been that new year, new me thing. So we're going to do that with our money. Now, I know it's the middle of the month already and you think, well, you should be doing this like the first week. But I was thinking about this, guys, I think January 16th I think which is the day we're dropping this podcast, I think that's actually officially quitters day if I'm not mistaken. But they have a term for it, people who set a resolution and then quit within two weeks. So I thought, well, let's wait till now and then we'll do our money attitude changing hopefully.
 
And that way hopefully people will stick with it when it comes to following their resolutions through. So let's get into it this week. John, how are you doing, my friend?
 
Speaker 2:
I'm doing all right. How are you?
 
Speaker 1:
Doing pretty good. Are you a resolution kind of guy? Do you set those?
 
Speaker 2:
I don't think I've ever set a New Year's resolution.
 
Speaker 1:
Really? Okay. All right. What about you, Nick? You doing all right?
 
Speaker 3:
Doing pretty good. I can't say that I am a much of a resolution person either.
 
Speaker 1:
Okay. Nothing wrong with that.
 
Speaker 3:
Yeah, but trying to do a little bit better, set some goals not necessarily New Year's resolution.
 
Speaker 1:
Well, I will say this, I'm not a resolution person either, but I did set last year as like I wrote four things down I wanted to accomplish in 2024. And I actually wrote it down, which I never do, and it actually kind of worked. So I kind of did stick with it and I got all four things accomplished. So I tried it again this year. So we'll see how it pans out.
 
Speaker 3:
Yeah, there's definitely science behind it, write it down and everything.
 
Speaker 1:
Yeah. So with that said, guys, what we're going to do is we're going to do that kind of attitude and we're going to do that kind of conversation piece here with finance. So if you're in that kind of new year, new me camp, this might be right up your alley. So guys, I'm going to give you the old you, like what maybe the old version of yourself might be saying. And then you give us the new you spin. Okay, so how to take it in that direction we want to improve on. So John, we'll start with you. So the old you might be like, man, I live beyond my means. I know I'm overspending. I got to get that under control. And A, first step is if you can accept that and admit that that's already a great thing, but what else should you be doing if you're trying to get into the new me?
 
Speaker 2:
Yeah, I think a first step for that is really take a look at where you're spending your money and prioritize what do you want to be spending on? So you kind of look at last year and say, "Hey, a lot of this stuff was unnecessary. I really didn't need it. Could have done without it." And maybe there was a little bit of guilt when you purchased it or did whatever you did. So I think prioritizing is step one. Setting a little bit of a budget. It doesn't have to be strict, but something that you could at least track as you just mentioned there, you wrote down some goals and it kind of helped you out. Same thing with this, write down where's your money going. And as I said, if something gets tracked you can definitely take a look at it and see where you can adjust it. And the hardest thing for most people and I've fell into this category at times, is kind of impulse buying.
 
So definitely figure out how to stop that, whether it's you see something you want, put it down for a second, take it out of the car and give yourself a day or two. And if you really like it, maybe go back and get it. But definitely stop yourself from that impulse buying.
 
Speaker 1:
Yeah, it can certainly get us.
 
Speaker 3:
Yeah. I would say too, one of the things that a conversation with some clients recently is those that maybe have a little bit of trouble from the spending standpoint, a lot of times they don't really have too good of a system for how they do spend. Meaning not necessarily setting a budget, but sometimes people will whipsaw from any sort of budget. I know that's kind of how I react. But having a plan of attacks. So for example, if we see people that use their debit card for a quarter of things, one credit card for gas, one credit card for publics, one credit card... And try to get all spread out, they oftentimes end up spending way more money than you realize.
 
Speaker 1:
Yeah, that sounds like a recipe for disaster for me at least.
 
Speaker 3:
Yeah. And so especially with clients that are one to two years out from retirement, more and more we encourage them to have the household use a single credit card that the website has a system where we can do an export or a data dump at the end of the year. It'll categorize the expenses for us, and we can kind of look from year to year and use those same categories that are a part of their card, to help them really see what's going on from year to year standpoint [inaudible 00:04:52] clients.
 
Speaker 1:
Yeah. And certainly you could do that with one card, you could do some points. I think if you can manage that stuff and then you can use that for flights and trips and things that... You can certainly kind of couple that credit card idea in there. But multiples for individual things, that definitely sounds like a recipe for disaster. So, all right, good job guys. I like that. So prioritize what you need if you're overspending or living beyond your means, maybe that wants versus needs list kind of thing. And to John's point, to curb those impulse buys, they can certainly get you. All right, so let's go to the next one here. The old you, now this might be a little bit more for our folks that are getting closer to retirement or maybe even into it guys, they are great savers. The old you has saved maybe even to a fault.
 
And I think a lot of retirees struggle with this, and you guys can talk to this point. But they don't now feel comfortable using it and enjoying it. They've gotten so grooved into saving for 40 years, they don't want to touch it. So how do you get that mindset to change to go, hey, this is what I worked for, let's enjoy this money in the new year, the new me, right?
 
Speaker 3:
Yeah. Fortunately from an advisor standpoint, we do run into this because it's a little bit easier of a conversation to have with clients versus the overspending one. But this is really kind of where we can focus on the planning, where the software that we use with us being kind of a planning focused firm, we really kind of go through stress test the plan, show them, hey, we've kind of planned for multiple different scenarios, try to have them zoom out a little bit. And again, just like a lot of things it ends up kind of being little psychological things that need to be done to make adjustments where they feel better, where maybe it's increasing their monthly distribution from their investment accounts so that when it's in the bank, they feel a little bit more comfortable spending it. Sometimes too, just playing games. We talked about using the credit cards as a consolidate and obviously pay off every single month.
 
But we've had a conversation with a client that liked to travel a lot. Her daughter had been pushing her to, instead of going on flights that... So from the outside you would look and see, okay, they travel a lot, they go do fun things but maybe it was all day of flying because they had two layovers or three layovers because they wanted the cheapest plane ticket. And so, hey, what are things that you can do to give yourself the permission to make that process a little bit easier for you? And sometimes that's points things. Sometimes it's just saying, "Okay, it's all right to spend a little bit more to make this process easier for you, so it's more enjoyable for you."
 
Speaker 1:
Okay. Yeah, and John, do you run into that sometimes where it's just convincing them, or maybe it's just showing them in black and white, "Hey, it's okay to spend this money. I get it, you've saved and you hate to see it go down and you're worried you're going to run out." But sometimes it's really just more of that just kind of coaching, I guess, just to show them it's okay to do this.
 
Speaker 2:
Yeah, that comes up a lot more than you would think because most people head into retirement. It's like, oh, now it's time to enjoy it and do the things I want. But that fear of running out money really sets in. So reviewing the plan, as Nick mentioned, really gives the most peace of mind. So I'll tell you, when we do our reviews and it's like, "Hey, this is kind of what you're set to have at the end of your plan.' It's like, "Okay, I feel comfortable spending then." And then it's always a good reminder to say, "Hey, if you're not going to spend it, I'll tell you your beneficiaries are going to spend it." So I think it's important that you enjoy yourself while you can. And most people, once we see the plan and we have that conversation, it's a kind of push to do it.
 
And unfortunately, next year it's another push to do it but it's always a good conversation. I'll tell you the ones that where it clicks, they're very appreciative of that conversation. It's kind of like, "Hey, appreciate you letting us know we're in good shape and we can kind of splurge a little bit more and do the things we want."
 
Speaker 1:
Yeah, and that's the point of coming back in for the updates and the consultations and the reviews. So you can keep track of that and make sure that you're feeling a little bit better about it. And yeah, to your point, what's the old saying, if you don't fly first class your kids will whenever they inherit the money.
 
Speaker 3:
I haven't heard that, but I'll start using that.
 
Speaker 1:
Oh, okay. Well, there you go. Yeah, start using that. If you don't fly first class in your retirement, your kids are going to whenever you leave them the money. So all right guys, so good job on that. Let's do another one here. So old you, I don't really know what I have or where it's at if I'm being honest. So a lot of people are in this camp where I got stuff, but I don't really know why I have it, where it's at and truly how much it is or how it works. So if the new you is trying to get better financially, whether you're still working, a pre-retiree or a retiree, what's some things to think about? John, you take off with this one first.
 
Speaker 2:
Yeah, so again, going back to the reviews, this happens quite a bit. As much as you show someone their plan, their net worth, this is what we do for a living so it's constantly on our minds, but the average person probably isn't thinking about their balance sheet or their net worth. But again, back to importance of doing your annual reviews or semi-annual reviews, it's a reminder of, "Hey, this is what I have and here's where all my stuff is." Because it can get confusing where you're talking about, hey, I have an account for this and then I have an account for income and I have a pension coming in. It does get, I would say, overwhelming. But when you have that plan, it's easy just to see it when you're with your advisor or if they have the tools and technology where you can just kind of log into a website or an app and you can just see it immediately. Typically, helps set people at ease.
 
Nick and I just got an email this week, similar thing. And we do our annual reviews and semi-annual reviews and check-ins quite a bit, but it's always nice for them. It's kind of a conversation of, "Hey, I don't know where anything is." We sit down, it's like, "Okay, great. I appreciate you guys. Thank you so much for sharing this and kind of walking me through it again." Because this is what we do and the average person it's not what they're thinking about day to day.
 
Speaker 1:
Yeah, for sure. Right. Good ahead, Nick.
 
Speaker 3:
I think the client's really trying to become more familiar with technology and using those tools that... because we do set those things up for clients so that they're able to check in on those things. And some like to see it, some don't like to see it, just kind of want the affirmation that things are okay. So it all just depends. But technology luckily has made it a lot easier for those that want to be more involved to be involved.
 
Speaker 1:
Yeah. And think about just not knowing where things are at and stuff like that. Especially if the loved one who is handling all that, which is typically the way it works, passes away. The one person it seems like that does this particular thing or whatever goes first, and then the other person's left holding the bag a little bit more. So having a good 30,000-foot view of things and knowing what you have, why you have it, where it's at. Important. Good stuff. All right. All good.
 
Speaker 2:
Yeah, Mark. And just to kind of touch on what you just said there, that happens quite a bit where a lot of people come to us and whether it's one spouse or the other. And it's, "Hey guys, I want to work with you. Very important we develop this relationship because if something happens to me, I want to make sure that my spouse has someone they can call on where they know everything that's happening."
 
Speaker 1:
Yeah, know where to turn, get some help because you're already dealing with a lot obviously. But being completely behind the eight-ball and not even knowing what's going on with your money makes it even worse. All right, let's do this, let's see if we can do one or two more guys here and then we'll wrap it up for the new year, new me conversation. Old you, until things settle down, I'm going to pause on my investments. We've seen this a lot last year, so I'm going to pause putting money in my 401k if I'm still working because it's so crazy out there. There's the election, there's the volatility, there's the wars, there's the whatever. That's just nuts to me because when is life ever... If anything we've learned since 2020, nothing seems to settle down in the last five years. So Nick, if you're trying to do the new, what's your recommendations for the pause until things settle down kind of person?
 
Speaker 3:
Yeah, you kind of referenced it from the standpoint of 2020, COVID, pre-COVID, post-COVID. We're almost four or five years post the beginning. And so the conversation that I'll oftentimes have with people is, yes, certain things may seem a little chaotic, but let's kind of rewind and let's talk about what we've been through over the last four or five years. And so in retrospect, does now really seem super chaotic and-
 
Speaker 1:
And more so than it was.
 
Speaker 3:
Yeah. And the important part of realizing that China time things rarely works, just kind of having the overarching plan, continuing to average into the market. And that the market tends to be resilient, especially with how money was printed during that phase of time. And so a market continues to be resilient. And for those that did decide to maybe sit on the sidelines, what is oftentimes even more stressful for them is kind of the re-entry and chasing, chasing returns, chasing timing. And then all of a sudden you look back and you have half the money that you could have had. So it's tricky.
 
Speaker 1:
Well, think about just people who, John might've even said this for the election, leading up to the recent election here this past November. Well, look at what the market's in the last two years, the S&P of the last two years was 20 plus percent. And if you were sitting on the sidelines because you were worried of what the election might do to it, you're kind of kicking yourself in the butt.
 
Speaker 3:
Yeah, and that happens a lot. And again, because sometimes people will make that initial decision, hey, I'm going to wait. Hey, I'm going to sideline some of this money. And it's one thing to do a certain percentage, that's fine. But maybe make a broad, really big decision and trying to then readjust that decision is even harder than the initial one.
 
Speaker 1:
Yeah. And I said, John, I meant to say Nick, apologize about that. But John, what's your thoughts on it?
 
Speaker 2:
Yeah, I've been saying things are going to settle down for me for the last five years.
 
Speaker 1:
Have they?
 
Speaker 2:
No, they haven't.
 
Speaker 1:
Right.
 
Speaker 3:
That's what he keeps telling me and I keep waiting.
 
Speaker 2:
Right. Yeah, no, I think there's always something happening. So I think the best time to start doing stuff is the present. There's always going to be something coming up. There's always going to be something why you shouldn't invest or why you should do whatever you got to do. So I think then the best action is save what you can and just continue to save. You'll be in a much better position and happier at the end.
 
Speaker 1:
Well, isn't that the point of your risk analysis anyway? Because something's always going to be going on. So if it's riskier right now and you want to pare back some risk, cool. But just wholesale jumping out, especially when you're thinking about just the dollar cost averaging, just the fact that you're losing over time by not putting in... If you're still working, you're not putting in your 401k because you're worried about what the market's going to do, that's just goofy. Especially if you're missing out on the free money from business and matching money from the company you might work for. So just lots of reasons to have a conversation. Again, to sit down with a professional if you're worried, if you are stressing over when's the right time to do this or that. Sit down with somebody so that you can kind of build a plan based on your comfort and tolerance level.
 
That's part of that, which really leads me to my last one, guys. If you're one of those folks that are in that, I have no financial plan. My parents didn't have one and it worked out for them I guess, so I'll just hope for the best. Many of us do this in the old you camp. So whoever wants to start with this one, I guess, John, I'll let you start with this one. If you're trying to do the new you, make a new resolution to get better financially and you're hoping for the best, that's not the way to go. So we've talked about it multiple times, but what should we do?
 
Speaker 2:
Yeah, definitely like I just said something's always going to be coming up and the present's the best time to start doing stuff. So we definitely recommend starting a financial plan. If you're just getting into it, maybe it doesn't to be a full comprehensive one, but something where it's just some type of outline, some type of goals you can start setting for yourself using... I'll say times have changed. My parents both had pensions and they were very blue collar old school, so they didn't have a plan. They just kind of went to work, got their pension and retired which most people could have done back then.
 
Speaker 1:
Sure. It was great.
 
Speaker 2:
Yeah. Now with pensions, pretty much for the most part, I don't want to say gone, but very limited to a select few, the responsibilities on the individual to be saving. And there's a lot more stuff going on now than there was 30, 40 years ago. So planning is very important and making sure you're on track, and hitting your goals and saving money is more important now than ever.
 
Speaker 1:
Yeah, for sure. And Nick, I'll let you have the final word here. You've got to take some kind of action. Hoping for the best, hope is not a strategy.
 
Speaker 3:
Yeah, we were talking about sayings earlier and I think there's some sayings out there about hoping without any action too. But from the standpoint of how things were versus how they are now, and John kind of covered the pension versus no pension. One of the other things are even if you decide, hey, from an investment standpoint you want to pick your own investments, that to kind of do it yourself, there are more tools than ever before to be able to do that. Whether it's targeted funds, index funds, the financial world has made it easier for people to engage. So that's a positive. But I'll say that I think the most alpha or the biggest benefit that people have is taking control of a strategy.
 
And that's really the biggest difference. You could take two people side by side, and if you were to break them down in 10 different variables and one of the variables that's different is kind of having a plan and not, they could have same income, they could have a lot of the same sort of setup. The person with the plan is going to outperform substantially. And that's just kind of how it is. So can't emphasize that enough.
 
Speaker 1:
All right, so before we wrap this up, guys, since we're talking about New Year, new me, Nick, tell us a little bit about the upcoming course you guys got going on at the end of the month. Folks want to attend. This would be a great way to kick the new year off, right?
 
Speaker 3:
Yeah, so we do the course and have been doing it for years. It's called Retirement Planning Today. It'll be up in Wesley Chapel at the Porter campus. It'll be starting on Thursday evening, January 30th from 6:30 to 9:00 PM. That'll be the session one. And then session two is the following Thursday, same time, same place. And if Thursday nights don't work, we also run it on Tuesday nights. It'll be February 4th, 6:30 to nine, and February 11th, 6:30 to nine. If anybody's interested, wants to go, just reach out to us directly. You can call our office at 813-286-7776 or email either John and myself. It's just our first name, nick@pfgprivatewealth.com or john@pfgprivatewealth.com.
 
Speaker 1:
All right, there you go. So if you guys want to attend that upcoming retirement planning workshop, that class, then definitely reach out to them. Let them know. Good stuff there. And that's going to do it this week for the podcast. So again, find them online @pfgprivatewealth.com or call the number as the guys mentioned, 813-286-7776. We'll catch you next time.
 

For Couples, Retirement Planning Is A Team Sport

Are you and your spouse on the same page when it comes to what retirement is going to look like? If not, it’s time to talk. Listen to this episode where we'll explore why it’s so important for couples to have detailed conversations about their finances and retirement futures. We’ll cover exactly what you need to discuss, and how to handle any disagreements.
 
Helpful Information:
PFG Website: https://www.pfgprivatewealth.com/
Contact: 813-286-7776
Email: info@pfgprivatewealth.com
 
Disclaimer:
Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.
 
 
Mark:
Are you and your spouse on the same page when it comes to what retirement is going to look like? If not, it's time to talk. So check into this episode where we explore why it's important for couples to have detailed conversations about not only their finance, but their retirement futures and their dreams, this week on Retirement Planning, Redefined.
 
What's going on? Welcome into the podcast. Thanks for hanging out with John, Nick, and myself as we talk investing, finance and retirement. And we're going to go to couples therapy this week here on the podcast a little bit, or maybe we'll make it more manly, I guess, and call it a team sport.
 
However you want to look at it, you want to be on the same page with your spouse, with your loved one when it comes to retirement. I wanted to talk a little bit about that this week, guys, to see how many people generally are on the same page by the time they sit down with professionals like yourselves, financial professionals, or if it's happening a lot in real time, right in front of you. So we'll get into it this week.
 
What's going on, John? How are you bud?
 
John:
Hey, I'm doing good. How are you?
 
Mark:
Doing pretty good, hanging in there. Looking forward to chatting about this a little bit.
 
Nick, I hope you're well.
 
Nick:
All good.
 
Mark:
All good as usual. Well, that's very good.
 
Nick:
Good start to the season for the bills, so I'm happy.
 
Mark:
All right, well there you go.
 
Nick:
It's early. It's early, but...
 
Mark:
My lions, my lions are all right for right now. We'll see. I don't have a lot of hope. 40 years doesn't bode well when you have one good season in 40 years, but we'll see.
 
Nick:
I get it, [inaudible 00:01:33].
 
Mark:
All right, so let's dive into this couple stuff here. Why is it important for couples to work together on their retirement plan? I mean, you come in, somebody sits down for the first time with you guys for a consultation, and they're just not even remotely on the same page. That's got to be a bit more problematic, yeah?
 
Nick:
Yeah. Not being remotely on the same page is tricky. I would almost say we probably, at least for John and I, we probably don't run into it too much where they're completely on separate pages.
 
Mark:
Well, that's good.
 
Nick:
I would say that there tend to be different ways that they think about money and kind of communicate about money. To be honest, that's one of the reasons that I would say that John and I like working together as a team with clients is because oftentimes one of us will kind of pick up more on the vibe that one of the people in the relationship is on, and then vice versa the other way around.
 
And so I'd say it's pretty rare that people in a couple tend to think about finances the same way. Even though they might end up having similar goals on the backside, they kind of attack it a little bit differently. And really it's, I think we joke sometimes, I think at this point we're 80% therapist, 20% financial advisors.
 
Mark:
Right.
 
Nick:
And really it's just trying to get people closer to the same page, and realizing that a lot of the things that they're talking about are pretty similar and they're just going about different ways to attack that.
 
Mark:
Well, John, to expand on that, when somebody sits down for the first time, do you guys, if they haven't really discussed some of those big issues, is it important that they maybe try to knock some of that out before they come in to see an advisor? Or does it not really matter as long as it's getting done?
 
John:
Yeah, I don't think it really matters. I think sometimes they're not even really sure exactly what to be knocking out prior. So to delay meeting with someone just to try to figure out, "Hey, are we on the same page?", I don't think makes sense. I think what tends to happen in our meetings is we'll ask some questions that kind of get them thinking a little differently. Like, "Oh, I didn't think about that." And ultimately, I think what we do when we do our planning, they tend to have some things come out and then they tend to kind of understand where the other one's coming from and that kind of lines up.
 
Mark:
Yeah. Well, I mean, I talk to advisors all across the country and I certainly hear stories often about people saying, one person will say something and the spouse will go, "Since when? I never heard of that."
 
Nick:
It definitely happens sometimes for sure. I would say almost that tends to be more on the lifestyle side of things.
 
Mark:
Okay, all right.
 
Nick:
Versus almost purely financial.
 
Mark:
Like "I want to go scuba diving in every major ocean or something." And the other one's like, "What?"
 
Nick:
Yeah, when the husband pulls, "I want to drive across country in the RV" card, that's where I've seen a lot of the sideway looks where... My parents are a good example, it's like my dad doesn't like to drive to Publix, but then he said he wanted to drive-
 
Mark:
Across the nation.
 
Nick:
... In an RV, because that's going to be more relaxing. And I remind him that a thousand miles is a lot worse than five. So there's things like that absolutely. How to spend that time, or even just the extra time together. I've almost seen it where it tends to be a little bit of a smoother process for couples when one person retires first, and maybe there's a year or two lag, where they kind of have a little bit of a staggering on spending an extra 50 hours a week together, which can be a little bit of a shock.
 
Mark:
Sure, yeah, it's a totally different animal. Yeah.
 
Nick:
Yeah, a totally different ballgame. So I would say from at least my experience with clients, it tends to be more in the lifestyle side of things. What I've seen most often with couples are it's rare that it's a 50/50 input on finances.
 
A lot of times I'll see it where one person might be a little bit more strategic on expenses, and then the other one might be a little bit more focused on the actual investments, things like that. But they end up being kind of having the same goal or outlook, but the lifestyle and how they're going to spend their time in retirement and how much they're willing to spend to do those sorts of things tends to be a little bit different.
 
Mark:
All right, John, well let me throw this one your way. So my wife and I are not usually on the same page when it comes to certain different things in a relationship, like most couples. And when it comes to risk, we are completely different.
 
So how can couples navigate if they are in different places risk-wise? Because let's be honest, I mean the statistics are what they are. Typically, us fellas tend to want to take a little bit more risk, and a lot of times the ladies tend to want to play it a little safer. Not always, but that's kind of the average.
 
So how do you guys handle that and what's some advice there?
 
John:
So we'll do risk tolerances for each client when that comes up. And we we'll find that someone, again, might be more aggressive than the other, so maybe their accounts are invested, maybe a moderate where someone else's, the spouse might be invested conservative. So that, having separate accounts makes that a little bit easier.
 
It becomes more difficult when it's the, a joint account. And what we'll do at that standpoint is we kind of go back to the plan. So a lot of the times it's what type of rate of return are we trying to achieve from the planning standpoint. We kind of have conversations, and we'll try to blend the two of them together.
 
I'd say for the most part, I don't want to speak for Nick, but he could jump in, have never really had this come up as an issue. It's kind of like, "Hey, this is how you want to do it. This is how this other person wants to do it." And for the most part, the spouses are okay with it as long as they're achieving their goals.
 
Mark:
Interesting.
 
Nick:
For the clients that tend to be, for the ones that have a little bit more of that risk appetite, we found through conversation that they have the risk appetite when things are good.
 
Mark:
Sure. Everybody likes it when it's up, right?
 
Nick:
Yeah, for sure. And not necessarily when things are bad. And so we're big fans of almost having, for lack of a better term, like a petty cash drawer or just kind of a smaller investment account that will carve out. So when there are clients that want to have that higher risk appetite, want to take opportunities to really kind of get some big upside.
 
Mark:
So that's your speculative casino type money, right?
 
Nick:
Yep.
 
Mark:
If you will.
 
Nick:
Yup, yup, exactly. And really too, because I would say the majority of our clients are pretty close to retirement or in retirement, they tend to, at least in our experience, be a little bit over that phase with any sort of larger amounts of money. Oftentimes they come to us and they're like, "All right, we had our fun and we're ready to be a little bit more in line on the risk side of things with the investment decisions that we're making." And oftentimes when we have that conversation of, "Hey, if you get an itch, let's have this off to the side and it'll help you make better decisions with the rest of the money." That tends to be kind of a winner for everybody.
 
John:
No, I was going to say, yeah, that's kind of what we reference sometimes as a cave, this is kind of your play account where you want to buy some individual stocks and things like that, where the fluctuation won't really make a big impact overall on your plan. So as Nick mentioned, that kind of satisfies some of the very aggressive clients.
 
Mark:
Okay. Well, so you mentioned the fact a second ago that a lot of your clients tend to be nearing or into retirement, and with a different demographic comes different feelings and mindsets about money.
 
So with that in mind, we tend to find that, which is really weird if you think about it this way, a lot of times you tend to find that in couples, going through the life, building of the life, raising the children, blah, blah, blah, blah, blah, typically the wife tends to budget the money, handle the money, so on and so forth. She's doing all that stuff in the house. But when it comes to retirement, it tends to seem like us guys tend to take the lead there.
 
Is it okay for one person to handle all the financial matters? Or do you guys really prefer that both people have a good understanding, even if it's not your bag, do you still prefer them to have a general, I don't know, 10,000 foot view of what's going on?
 
Nick:
Yes. I would say too, more and more that, again, from our experience, and maybe it's our clientele where you've got a lot of households that are both people work, both have retirement accounts, and although they may make some differences from the perspective of risk in their portfolios and stuff like that, it tends to be a collaborative effort. Again, I would say we have, anytime we do planning, we have clients fill out an expense worksheet. It's rare that they both fill it out. It's usually one of the two that are filling out the expense worksheet.
 
And so it does tend to get kind of broken up a little bit from who focuses on what. But it's definitely important that they're both on the same page and have a good grasp and an understanding. And I would say too is the easiest example of that, and the people that work with us kind of know this is there's one report that we go over with clients, it's like a cashflow. It's in detail, wall of numbers, lots of columns, can be kind of intense. And then there's an area called the decision center, which takes all those columns and it puts it into kind of a graph format and it's more interactive.
 
And I think that's kind of almost the best illustration of the different sides of the brain where one person in the couple sometimes likes the details and likes the column report and they like to, because they can go in on their client side of the portal and go through that and re-review it. And the other one is, "Hey, let's zoom out. Give me the broader picture. Are we good? Are we not good? Give me an idea of a couple of decisions that we need to make moving forward and let's go from there."
 
Mark:
And there's no right or wrong to either one, it's just what is your personal appetite? But I think neither, like if both of you don't have a good understanding, John, that's a recipe for trouble later on too.
 
John:
Yeah, no, I'd agree with that. It's important for both to at least have an idea of what's happening and working as a team, whether one takes a lead and one takes a backseat, we encourage everyone to have a general understanding. Because this past year has been interesting where I've had some clients have some health issues, pass away. And you got to make sure that both pistons are aware of what's happening because you don't want that situation where it's like, "Hey, I don't know where anything is. What do I do?" So [inaudible 00:11:43].
 
Mark:
That's exactly the point, right? Yeah, that's the worst case scenario. And it often, it happens more times than people realize. So you both want to have a decent understanding, even if it's not your thing. And again, no gender roles there. It tends to be the case, but I mean, my wife is way smarter than I am, and she actually deals with, she's very analytical and deals with money and numbers all the time for work. And it's one of those things where when it comes to our retirement, she's like, "I don't want to deal with it. So you deal with it."
 
And it could just be as simple as, "I deal with numbers all the time, I don't want to deal with it yet another way." So no matter what it is, you find a way to make it work, but not having a decent understanding of what you have, and why you have it and who to turn to in the event of a catastrophe, is a recipe for disaster. So obviously if you're working with a financial professional and a team like the guys at PFG Private Wealth, then at least you also have that resource to turn to when something does happen like John just mentioned.
 
So one final question here, I'll let you both kind of jump in and chime in a little bit here. What final piece of advice would you give to couples who are maybe just beginning their retirement planning journey, when it comes to making sure that they both are feeling comfortable?
 
Nick:
I think it depends on what phase they are in life, but in general, I think it's hard to screw it up long-term, if you're saving money. So even if you are very conservatively saving the money and you're not getting much return on your money, that kind of instills an ingrained habit of saving money and being used to living on the rest. That will lead you to better habits and better outcomes.
 
You can always take the next step in, whether it's working with an advisor, whether it's doing research by yourself and then making better and smarter decisions on how you invest that money that you saved. That tends to be kind of the easier part. But the behavior of saving that money first and then going from there, is the number one thing, I think that's important.
 
Mark:
Okay. That's his advice there. What do you about you, John, what do you think?
 
John:
Yeah, it's really similar. You can never go wrong saving. And it's really just kind of the words that just get started. Just get started saving, just get started planning, get started with any of it. Whether you have kids, you want to make sure that estate documents are in place, insurances are in place.
 
So depending on what phase, it's just a matter of getting started with the overall planning, and saving is definitely where you want to be the forefront. Because like Nick said, you can't go wrong. You're never going to be mad looking back saying, "Man, I saved way too much for retirement."
 
Mark:
Right, exactly. Taking the forward steps and doing something to quote the rush song, right? If you choose not to decide, you still have made a choice. So don't make that choice to do nothing. Do something for yourself and your future self and get started today. Make sure that you are planning for retirement and having conversations with your loved ones so that you guys are on the same page.
 
And of course, as always, if you need some help, make sure that you get onto the calendar with qualified professionals like the team at PFG Private Wealth. You can find them online at pfgprivatewealth.com. That's pfgprivatewealth.com to get yourself some time on the calendar to sit down with John and Nick and get started today.
 
This has been Retirement Planning, Redefined. Don't forget to subscribe to the podcast on whatever major podcasting platform app you like to use. They're on all of them. So you can just type in Retirement Planning, Redefined in the search box, or just go to pfgprivatewealth.com.
 
We'll sign off for this week. For John and Nick, I'm your host Mark, and we'll catch you next time.

The Magic 8 Ball’s Guide to Retirement Planning

Remember the thrill of shaking a Magic 8 Ball to get answers to your childhood questions? Would we ace that math test? Would we be famous someday? Well, today, we're bringing a bit of that magic back. But instead of asking about pop quizzes and playground crushes, we’re turning to the Magic 8 Ball for advice on something much more important: your retirement planning!
What would the Magic 8 Ball have to say about these common retirement questions if it had the wisdom of a financial advisor?
 
Helpful Information:
PFG Website: https://www.pfgprivatewealth.com/
Contact: 813-286-7776
Email: info@pfgprivatewealth.com
 
Disclaimer:
Speaker 1:PFG, Private Wealth Management LLC is an SEC registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk and unless otherwise stated are not guaranteed. Be sure to first consult with a qualified financial advisor and or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance insurance. Products and services are offered and sold through individually licensed and appointed insurance agents.
Speaker 1:
You all remember that thrill of shaking the Magic Eight Ball to get answers to those childhood questions we couldn't wait to find out? Would we ace that math test or be famous someday? All those crazy fun questions we had when we were kids. Well, this week on the podcast, we're going to do the Magic Eight Balls Guide to Retirement Planning with John and Nick here on Retirement Planning Redefined.
What's going on everybody? Welcome into the podcast. Thanks for hanging out with John and Nick and myself as we talk investing, finance, and retirement. And we're going back to our childhood with the Magic Eight Ball. Going to have a little fun with these things and shake it up and see what kind of answers we get for retirement. Then of course, let the guys give us some proper answers just in case the Magic Eight Ball gets it wrong. But guys, what's going on this week? Good to talk with you as always. Nick, how are you buddy?
Nick:
Good, thanks. Just staying busy.
Speaker 1:
Staying busy, rocking and rolling. Very good. John, my friend, how are you?
John:
I'm doing all right. Getting ready for this upcoming storm we have, so.
Speaker 1:
Oh, big fun. Yeah.
John:
Getting to the grocery store quick, so all the crazies don't run me over.
Speaker 1:
Nice. Now you got little ones. Do they still sell the Magic Eight Balls in the store? I think they still make them. Don't they?
John:
They do. I think we had one at one point.
Speaker 1:
Nice.
John:
And it didn't work very well, so anytime they asked a question, it would end up on the side and they're like, what does it say? And I don't know.
Speaker 1:
I can't see it. You got to reshake.
John:
It was definitely something good that entertained them for a little bit.
Speaker 1:
Yeah.
John:
But like any little kid nowadays, it lasted all for about 20 minutes.
Speaker 1:
Oh, yeah. Yeah.
John:
Like, all right,-
Speaker 1:
Well I'm a wee little kid of the 70s, so I thought they were great. That and the Etch A Sketch and the Stretch Armstrong, I was a happy dude, so. But anyway, let's have a little fun with this, this week here and I'll toss you guys out a question. You kind of give us the Magic Eight Ball and your answer to it, or at least what it maybe should be, so to speak. Right. So we'll make it easy to kind of get things started. John, I'll toss this one to you. Should I start saving for retirement now? What's the Magic Eight Ball say?
John:
Magic Eight Ball is going to say yes, definitely. The sooner you can start the better. And that goes for anybody, whether that's you in your 20s. I have some clients that right out of college started and now they're in their late 30s, and when we do reviews occasionally, it's always like, "Hey, really appreciate you kind of getting on me for starting to save," because as life happens, expenses are going up, they have kids and stuff like that, it's harder to save. But when they didn't have too much going on in their early 20s expense wise, they were definitely built up a nest egg, so.
Speaker 1:
Yeah.
John:
If you haven't started at any point, wherever you are, 20, 30, 40, it's good idea to start.
Speaker 1:
Yeah, I mean 50 as well, right? I mean it doesn't make a difference at this point. Waiting yet another day only causes you more problems, right? So should you start now? Definitely. And I'll give you guys kind of a little primer on the Magic Eight Ball. So we kind of looked through some of the stuff. They have, I guess what you'd call the green, kind of the positive answers, right? Stuff like the one John just got there, yes, definitely, most likely, out look good, that kind of stuff. Then they had that kind of middle of the road, nah, not so sure, right? Reply hazy, ask again later, better not tell you now, that kind of thing. And then of course they had the negatives, which was my reply is, no, very doubtful, don't count on it. So on and so forth. So we'll use those answers to kind of kick things off with each one of these episodes and then let the guys expand on it like John just did. All right Nick, so your turn, give it a go. Is a million dollars enough to retire on? What says the Magic Eight Ball?
Nick:
That's definitely a reply hazy, try again answer on that one. A consistent conversation that we have with people, whether it's somebody that we've worked with for a while or somebody that has come to us and we're kind of taking them through the planning process is that everybody's situation is different.
Speaker 1:
Sure.
Nick:
People love to compare things with each other, whether it's cars, houses, finances, whatever. And we try to make sure that people understand that comparing themselves even to a sibling or a neighbor or friend doesn't necessarily make sense. Some of the most common examples that we'll see are people that maybe they have pension plans because of the sort of job that they have.
Speaker 1:
Yeah, they saved a million, but they got a pension versus someone who saved a million and doesn't. That's a dramatically different setup, right?
Nick:
Correct.
Speaker 1:
Yeah.
Nick:
Correct. Yeah. And so assets are important obviously, but really the end game for assets in retirement is to generate income. So ideally people will have the combination of both, but having an arbitrary number like a million dollars is something that doesn't make a whole lot of sense. And I know that recently there's been some kind of articles in the news about, I think we just hit the highest percentage of millionaires in the US.
Speaker 1:
Right.
Nick:
And even from that perspective, dependent upon the situation, again, a million dollars isn't what it used to be. So it really just all depends. We've had clients that have had five or $6 million going into retirement that when we look at their plan, they're going to burn through that in 15 years because they spend too much. And we've had clients that are retired with five or 600,000, but they have their expenses very much in check, they have no debt and they live within their means and their plan looks great.
Speaker 1:
Yeah, there you go. I mean there's three of us here on this podcast and it might take a million for one and 500,000 for the other and two and a half million for the other. Right. It all just depends on where you live, how you live, all those sorts of things. So yeah, reply hazy, try again. And really what it comes down to is get a strategy, get a plan, and get the numbers crunched for your specific situation and then you're going to understand exactly what you need to get to. You're going to have a better outline versus just kind of a shaking the Magic Eight Ball.
And I think the idea behind some of this too was fun. You know how you guys in the industry know this. There seems like there's always advisors out there that have a little crystal ball on their desk and they like to say, "Let me check the crystal ball," when somebody asks them a question and they're like, "Well it doesn't work today." And that's because it's not a sound way of doing things. So we thought we'd take that kind of analogy and apply it to this week's podcast. So back to you, John. Can I rely on social security for my retirement?
John:
Say out look not so good.
Speaker 1:
Right.
John:
Yeah, definitely not what you want to be banking on. It's a good source to have.
Speaker 1:
Sure.
John:
But you do not want it to be your only source.
Speaker 1:
It's big dollars. I mean it can be big dollars for a lot of people. And I think an interesting question, and I put it this way, is I've got a family member, a loved one who totally survives on social security only, but it's not what she wanted, right? So could you do it? Yes. But is it ideal? No.
John:
Yeah, no. I think on average social security covers maybe 30, 40% of someone's retirement income. So you have to look at where's the other money coming from. So just planning on social security I would say is not a very good plan.
Speaker 1:
Very true, very true. Well following that up there, Nick, give us the Magic Eight Ball answer here. Is it wise then to have multiple sources of retirement income?
Nick:
It is absolutely as imperative as you can get to try to have different sources of income. A conversation that we have with people consistently is that from the perspective of planning, the one thing that we know and that we can absolutely count on every single year, year after year, is that there's going to be change. And so anything that you can do to build in options, build in flexibility, allow yourself to adapt and pivot to what's going on is essential. And part of that is income streams, not only diversifying assets, but diversifying income streams.
Speaker 1:
Definitely. Right. So you definitely want to have those. Social security is a big piece of it, but it doesn't need to be the only one. You need to have multiple sources of income streams. All right, John, back to you. Can I expect to have fewer expenses in retirement compared to when I'm working? What's the Magic Eight Ball say?
John:
I'd say don't count on it. Again, I don't know, we've kind of preface this quite a bit and we've even said it today, everyone's different. So we've had some people where expenses have gone up during retirement because they want to vacation more, they want to do more things with the family. So I wouldn't say plan on that necessarily. And the only way to really find out is to do a comprehensive plan, but then there's going to be curveballs that come at you, whether it's health expenses. That tends to not go down as we get older. So maybe something could be dropping off.
Speaker 1:
Right. Right.
John:
But you never know what's going to get added. So do your plan as best you can and try to be as accurate as can. But I wouldn't have that be like the bulletproof, like, hey, my expenses are going to drop so I should be good.
Speaker 1:
Well, that's a great point because a lot of times people say, hey, here's our back of the napkin math. We think if we curtail this a little bit and this a little bit, we can make it work. Right. We can kind of squeak into retirement. But then you get there and you think, I don't want to do that, right? And there's certainly a lot of conversation around regrets that people have when they're talking once they get to retirement and they go, boy, I wish I would've spent more in those early years when my body would've let me go out and do some things that I wanted to. Right. So can I expect fewer expenses? Yeah, probably not, right? Because like you said, things are going to drop off, but other things are going to add and of course don't count on it. I think that was the answer Rhonda Thomas gave me when I asked her to the seventh grade dance, I think she said don't count on it. I think she must have got that from Magic Eight Ball as well.
Nick:
That's stuck with you.
Speaker 1:
Yeah, right. Exactly. It stuck with me. I'm still wounded Rhonda, if you're listening. All right, so let's do the next one here. Should I review my retirement plan annually? Nick, what says the Magic Eight Ball?
Nick:
Without a doubt on that one. Going back to what we talked about earlier, things constantly change. So updating the plan is really important. The most recent example of why that's important has been inflation over the last couple of years. So when we do a plan and we put in an inflation increase every year in expenses, the software still requires us to kind of update those baseline numbers. And so what we found and what we've tried to emphasize to people is that us capturing and updating those baseline numbers every two or three years is really important and gives us a much more accurate projection from the perspective of planning. So,-
Speaker 1:
Gotcha.
Nick:
Those annual reviews are important.
Speaker 1:
Yeah. And that's how you kind of keep track of the expense changes or the income source changes or added a grandchild, want to change this, whatever the case is. So all those annual things are certainly important. Your life's going to change, your plan has to change along with it. All right, John, will my retirement plan be affected by future changes in tax laws? Not to get political, but you have to talk policy and certainly when it comes to taxation, that's going to be part of the conversation. I mean, seems like everything is political these days, but if you're thinking about future changes in tax laws, you're going to have to certainly think along those lines as well. So what says the Magic Eight Ball when it comes to will your plan be affected by it?
John:
Signs point to yes.
Speaker 1:
35 trillion? Maybe. Yeah.
John:
Yeah. So you definitely want to take that into account. I mean if you look at maybe people that retired in the 70s and then all of a sudden the 80s, your social security is getting taxed, you weren't really anticipating that happening and then,-
Speaker 1:
Oh yeah, the IRMAA tax, right? That gets a lot of people blindsided.
John:
Yeah. So you could count on taxes changing. Whether it's going to go up or down, again, we don't have our crystal ball, but we have the Magic Eight Ball here. Something's going to happen and you should be planning for that. One thing you could do when you're running retirement plans is you can have the ability to stress test it, to take a look at it. So definitely plan on it.
Speaker 1:
Yeah, I mean you figure, look, regardless of where your political bent is, we've got a lot of debt and so taxes are going to have to change. And even if it's not this particular administration change, this current election, right, God willing, you live long enough in retirement. If you last 20, 25, 30 years in retirement, you're going to see multiple administrations come and go. And that's going to mean multiple tax law changes because they do that every so often. Right. So the odds of that happening are pretty great. So signs point to yes, you should consider how taxation is going to affect you because it is one of the biggest pieces of your retirement strategy. What is that old saying? It's not what you make, it's what you keep, right? So make sure you're talking with qualified professionals like John and Nick when it comes to dealing with all this stuff. Let's do one or two more and then we'll wrap it up. Nick, let's toss this over to you. Let's see here. Should I focus on paying off debt before increasing retirement contributions?
Nick:
So I would say depending upon the debt, most likely.
Speaker 1:
Okay.
Nick:
From the perspective of consumer debt like credit cards, all that kind of stuff,-
Speaker 1:
Bad debt, right?
Nick:
That can absolutely, it's hard to argue that that's not unimportant. One thing that can be a slippery slope for people is it kind of tends to depend on their behaviors. We've had clients that have been good income earners but have at different times had debt problems. And in certain ways, whenever they pay off the debt, the debt comes back up and then they kind of find themselves not saving at all. So it's oftentimes kind of a balance of both. One of the most common sorts of comparisons from a perspective of debt is mortgage. We found that over, we had a lot of those conversations when interest rates were really low and we kind of emphasized with people to take advantage of those low rates and that's come to be a pretty beneficial sort of decision. So I would say in order, consumer debt for sure, trying to do both consecutively, both at the same time, obviously ideal, and then just kind of working through the plan and prioritizing what makes the most sense and how to deploy the money.
Speaker 1:
Yeah, definitely, right? I mean, debt's going to be a big component of that as well, and certainly getting rid of that, the higher interest stuff is always a good idea. So the final piece then here guys, and John, we'll let you wrap it up since you started it. Should I consider working with a financial professional as I near retirement? This is kind of a layup for you, but I'll give it to you anyway. What do you think?
John:
Appreciate that layup. Answer is yes. As you're getting closer to retirement, it becomes even more important to make sure you're working with someone to update the plan or start a plan and take a look at it. I would say you don't have to wait until you're near retirement. I think the answer is yes at any point.
Speaker 1:
Yeah.
John:
Even my younger clients, they always appreciate having someone they could talk to and bounce some ideas off of, whether it's not always comprehensive planning, but it's someone you could talk to discuss things.
Speaker 1:
Exactly. Because there's so many nuances out there and it just continues to grow and get more complex. So certainly not a bad idea at all to get qualified professionals on your side. So if you need some help, reach out to the team at Pfgprivatewealth.com. That's Pfgprivatewealth.com and don't forget to subscribe to the podcast on Apple and Spotify or whatever platform you like using. It's Retirement Planning Redefined with John and Nick from PFG Private Wealth. And we'll see you next time here on the show and enjoy the Magic Eight Ball. We'll catch you later.
 
Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.
 

Combatting Popular Excuses For Poor Financial Decision-Making

Very often, we see people who know that the financial decisions that they’re making aren’t the best decisions, but they try to create excuses or explanations for why they’re doing what they’re doing. Let’s talk about why these excuses usually don’t hold water...
 
Helpful Information:
PFG Website: https://www.pfgprivatewealth.com/
Contact: 813-286-7776
Email: info@pfgprivatewealth.com
 
Disclaimer:
Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.
 
 
Marc:
This week on the podcast, we're going to talk about combating popular excuses for poor financial decision-making. Very often we see people who know that they've made some poor financial decisions and they try to explain it away or create excuses as to why they've done that. So we're going to talk about that this week from things the guys have seen and maybe that'll shed some light on your situation right here on Retirement Planning Redefined.
Announcer:
The rules of retirement have changed. No longer can most of us rely on Social Security or a single pension to fund our futures. We're living longer and retirement doesn't just last a handful of years anymore. Instead, you might stay retired for 20 or 30 years and maybe even more.
We need to look at retirement through a new lens with fresh eyes, with a new approach and plan of attack. Here to answer the call are financial advisors John Teixeira and Nick McDevitt of PFG Private Wealth Management, serving you throughout the Tampa Bay area. This podcast is Retirement Planning Redefined, and it starts right now.
Marc:
Hey, everybody, welcome into the podcast with John and Nick from PFG Private Wealth here with me to talk investing, finance, retirement, and hopefully avoiding some of these poor financial decisions that everybody gets into. It doesn't make you a bad person, doesn't mean you did anything wrong. But if we can learn from the mistakes of others, I forget who said that, was it, Einstein, probably a little bit better off than making some of these mistakes ourselves.
And of course, the guys helping many families retire, so they have seen a lot of this stuff and a great resource for you to tap into. So if you've got some questions, make sure you reach out to them at pfgprivatewealth.com. That's pfgprivatewealth.com. What's going on, John? How are you doing this week?
John Teixeira:
Hey, I'm doing all right. I'm doing all right, doing real well. So I think you mentioned the end of the last podcast with new puppy. I don't think we talked beginning, but yeah, new puppy is doing well. My girls are attaching to it quite a bit. It's funny, because if my wife and I go to feed it, they're like, "No, no, no, no, I'll feed it. I don't want you bonding with it."
Marc:
Oh, nice. Okay.
John Teixeira:
They want to make sure the dog's their friend.
Marc:
Their dog.
John Teixeira:
They're pretty excited. It's really cute.
Marc:
Nice. Very cool. Very good. Well, Nick, my friend, how are you doing?
Nick McDevitt:
Pretty good. Pretty good. Speaking of dogs, I was with family this past weekend and my sister-in-law reminded me that I volunteered to take care of one of their dogs when they went out of town soon, and I had totally forgotten. So be on doggy duty for about 10 days, which I'm actually looking forward to, so it'll be fun.
Marc:
That's cool. Yeah, very good. Good stuff. Your sister live far away, or do you have to?
Nick McDevitt:
It's brother and sister-in-law. They're down in Sarasota, so yeah, not too far. The last time I took care of this dog though, it was pretty funny because he's not used to being in a city setting, so he's just used to being in his backyard. There's so many other dogs around, all the scents. He wouldn't pee for almost two days.
Marc:
You're driving him nuts, huh?
Nick McDevitt:
Yeah. Yeah. So I was taking him out every two hours to try to get him to finally go, so I'm hoping this time it's a little bit smoother.
Marc:
There you go. Very good. Little dog stories here to kick things off. Always good. So man's best friend. Well, let's get into some conversations here, guys, about these poor decisions. Hopefully you won't make any poor decisions when it comes to the dogs, but let's talk about some of these from a financial standpoint, guys. I got some classics here I want to share with you, and then you guys give us your take on what you guys see and how you guys react or help folks through these types of things.
So for example, when someone wants to start their social security early at 62, a lot of times the excuses or the explanation is, "Well, they owe me, right? Or I've paid into the system. I want it back before it goes bankrupt," all that stuff we've been hearing the last couple of years.
Nick McDevitt:
Yeah, definitely heard this one or 100 times, but history has shown that if you can afford to wait, one thing that people are noticing, I would say we have less and less clients retiring pre 65, unless there's something that happens, maybe a health situation or loss of a job and they need the income at 62. That's one thing.
Marc:
Well, that's the thing, right? If you're talking about excuses, Nick, if you need it, you need it. But if you're just turning it on because you feel like you want to stick it to the government or whatever, you could be costing yourself a lot of money.
Nick McDevitt:
It has a huge impact over time, especially in the last four or five years where the inflationary raises that have been given for social security have been much higher. People that waited because they get that inflationary raise and people that are collecting get the inflationary raise, but it's compounded when waiting because you get the normal increase plus the inflationary raise.
The amount of benefit for people that have made that decision to wait has been substantially higher. And we've had a lot of people that have clicked over to that 64, 65, 66 and have started to take their benefit or will be. And we look back at those numbers. And to a person, they've all been extremely happy that they waited because the benefit is substantially more.
Marc:
And John, I mean, if you are thinking about turning it on, don't forget that if you decide that you're bored and want to go out and earn some money or something like that, there's going to be limitations there too. There's more than just the haircut that you take from taking it early. There's some other things that go along with that.
John Teixeira:
And that's one of the things. Typically, as you guys already mentioned, when someone brings this up, it's really what do you need it for or why are you taking it? And the big thing is are you still working? And if you are or if you plan to work even part-time and you make above I think it's roughly 20 to 23,000 or so...
Marc:
Around 20, 21. Yeah, somewhere in there.
John Teixeira:
If you make above that, there's what they call a recapture. So they'll take half of it above that amount. So it's definitely something to consider is are you working currently or do you plan to go back to work? But once you hit your full retirement age, you are able to take your social security and not worry about that.
Marc:
Yeah, sky's the limit then, right? You can make as much as you want then.
John Teixeira:
But beforehand, definitely something to consider. And what we typically do for clients on this, and we'll offer it to anyone that's listening, is we can run a social security max strategy, which helps people see it. It's one thing to say, "Hey, I want to take it now." But once they see it, and like Nick mentioned, that compounding is really important with waiting, with the cost of living adjustments that you get.
And especially we talked last time about inflation and how that's gone crazy, so you really want to plan correctly. Once people see it on paper, it tends to slow them down from taking it, but everyone has their different opinions.
Marc:
Yeah, for sure. But again, if you're doing it just because it's like, hey, I want to get it before it runs out of money or something, don't make that excuse. Run the numbers, as John said. Get a stress test maximization on that social security strategy before you turn it on. And then if you need to turn it on, well, certainly turn it on. That's the point. All right, number two, when someone is taking too much risk with their money, we often hear things like, "Well, I'm behind. I'm making up for lost time." We talk sports often on here as well.
If you're thinking about baseball, the home run kings, typically the people that usually hit the most home runs, are also the strikeout leaders because they're swinging for the fence a lot. And so just be careful when you're doing that. Whoever wants to take this one, feel free to jump in here. But if you're behind, that's one thing. A lot of us do feel that way. But I guess the first question I would have is, how do you know you're behind? Is it just a feeling or have you actually gone in and sat down and had your numbers ran?
John Teixeira:
Yeah, this is a really common one. When talking about getting these, I got this a couple of months ago and the person wasn't behind. They felt like they were. But when we started doing the planning, they weren't. But a big thing with this, especially trying to get more aggressive is it's going to take you outside of your risk tolerance. Can't stress enough that you really want to stay in with whatever risk tolerance you have.
Because if the market starts to fluctuate and you can't handle it, so if all of a sudden we have a COVID type year or whatever might happen, the market's down 20, 30% and you start to panic and you go to cash, and then within a month later a rebound, you just missed out on all that upside. One of the first things in investing is understanding your risk tolerance and investing in that type of portfolio so you don't make mistakes.
You really don't want to chase any returns or anything like that and feeling like you got to catch up. Because ultimately if you do that and you're not a risky investor, you're going to end up even more behind.
Nick McDevitt:
And oftentimes too when people are actively making that decision like, "Hey, I'm going to take a little bit more risk," and when you kind of flush it out and you talk about it, they're often under the impression that they will exit at a certain point like, "Oh, I'm just going to wait until I make X amount or I get this amount and then I'll back off."
But when you're in the midst of things going up, it's very difficult to walk away. And trying to time things, having that perception that they can time it is extremely difficult. And the overreaction that tends to happen after that just puts them into a highly volatile situation. Human behavior comes in and just makes it very difficult to be able to even benefit from it, even if it does work out.
Marc:
I mean, getting that risk analysis done to find out, okay, am I behind and how much risk can I take or should I take, feel comfortable with taking? All of that is part of sitting down with a qualified professional to find that stuff out. And I think we all, human nature, a little bit feel like is once you get to 50, I think that switch kicks in and we're thinking, okay, I've got to start thinking about retirement. And boy, I haven't done a whole lot, whether you have or you haven't.
So again, run the numbers, sit down and have that analysis done. That's going to help you understand whether you're behind or not. So let's go to the third one here, John. How about this one for you? When someone has way too much cash, often it's, well, I've been burned, right? Or maybe even more recently right now is, hey, it's a pretty decent rate. With the interest rates rising up, I'm getting a decent rate at the bank, so why not just sit in cash?
And that's fine, but it's also not going to last real long. And you're not going to just automatically get that 5% or whatever that you'll see ads for right now. If you just have money sitting in your savings account, check your savings account. It's not generating that much. You're going to have to talk to the bank about a different product. They're not going to automatically just increase your savings account interest rate.
John Teixeira:
And this goes back to the risk tolerance as well. The first part that you said here of people being wary of the market or they've lost before. So this is what happens, and we've seen clients that lost money in '08 and doing plans for them and introduced them in 2016, 2017, and they were in cash for almost eight years and they'd lost out on some big runs.
So if they were invested properly, it wouldn't have been the issue. So you definitely want to, again, risk tolerance, get the plan down, stay the course, because long-term history has shown us that you will in a portfolio basically beat the cash just sitting in cash all the time.
Marc:
Oh yeah. I mean, it never does. No matter what the interest rate, even people who live through the late '70s, early '80s when interest rates were really high, 12, 13, 15, 16%, it still wasn't beating inflation then. I mean, that's the thing with the interest rates at the bank, they never outpace inflation ever. It's there for that safety portion.
John Teixeira:
Yeah, exactly. And as far as people that are with money on the sidelines and they want to stay in the money market getting some rates, you're right, it's not going to stay like that forever. They're trying to force these rates ultimately down at some point. The thing is going to be the timing of when do you get back in.
So we have some clients that earn that scenario, and we're doing a combination of cash and also dollar cost averaging into the market to give them best of both worlds right now to take advantage of the nice cash that they have, nice interest rate. Again, not just sitting in a savings account in some type of money market, but also trying to take advantage of potential upsides in the stock market.
Marc:
Yeah, for sure. I mean, again, all this stuff we're talking about this week is they sound like a good excuse, but when you really break it down, again, you need to have that analysis before you start rationing away these decisions that you've made. Nick, how about this one for you, my friend?
When someone has no idea what they're invested in, which is often people come in and say, "Hey, here's my stuff, here's what I got," often the excuse is, "Well, finance isn't my thing, or I was told to get this or that, and I don't really know what it's doing for me." And that's certainly not where you want to be. You want to understand what you have and why you have it.
Nick McDevitt:
Having had this conversation many times, one of the things to try to point out to people is that we can't care more about your situation than you do. So we don't necessarily need you to be reading The Wall Street Journal every day. But at the same time, we want there to be a level of engagement. We want there to be questions. And really I think the trend of the last five to 10 years is people realizing that strategy and planning when you zoom out is becoming more and more important than maybe the underlying investments.
Even if you look at a simple example such as target date funds and 401(ks), the tools that are out there make it easier and easier for people to be able to put something on overdrive to a certain extent versus 10 years ago, a default strategy might be a money market fund that back then was paying 1% and people start putting money in. They don't realize their money's not doing anything, where a lot of times the default strategy these days is going to be a target date fund and there's some actively managed things happening inside of that to help them move it along.
But maybe they haven't incorporated in or understand like, "Oh, 401(k)s have Roth options now. Have you started to do that? Or, hey, maybe your company has some discounted stock plan that you can participate in." And if it's a publicly traded company and you're getting a 10 or 15% discount right off the bat, you almost don't even have to do anything. You just need to make a really basic decision to do it. So the level of engagement from a strategy standpoint is an important thing, and the underlying how to get exposure to those markets has become easier with time and technology.
Marc:
Yeah, great point for sure. All right, John, any final thoughts from you on that same one from Nick?
John Teixeira:
Yeah, yeah, to add to that, something we've seen right now what Nick mentioned with the cash or someone sitting in money market not realizing it, we've seen that with annuities as well. A lot of annuities right now, the rates have gone up and the products look pretty attractive. But some client, if you're not looking at your stuff, you could be in an older one where today's rates might be five, six times better than what you're currently getting.
So it's important to take a look at what you have, do a quick snapshot of it and just understand, "Hey, this is where I'm at. Is there anything better I could be doing," which everyone should do at some point.
Marc:
Yeah, for sure. And there's usually little tweaks. Sometimes people think, well, I probably should sit down and talk with a financial professional, but it's going to be this major undertaking or whatever. Not always. Sometimes it could just be little tweaks and whatnot. So go check them out online, pfgprivatewealth.com. That's pfgprivatewealth.com. You can book an appointment right there on the page, top of the page on the right-hand side there. There's lots of tools, tips, and resources.
You can click on the podcast page to check out past episodes or subscribe to us on whatever platform you like using, check out the blog, and so on and so forth. So a lot of good information there at pfgprivatewealth.com. And again, you can subscribe to the podcast on whatever platform you app you like using, Retirement Planning Redefined. Thanks for hanging out with us this week. We always appreciate your time. For John and Nick, I'm your host, Mark, and we'll catch you next time here on the show.
 

Take the Fork: Yogi’s Wisdom on Making Financial Choices

In this episode, we’re diving into some famous words by the one and only Yogi Berra. You might know him for his legendary baseball career, but Yogi was also a goldmine of wisdom. We'll spin some of his classic quotes into financial advice. It's all about viewing things through the right lens—so let's see what financial insights we can uncover from Yogi’s memorable sayings!
 
Helpful Information:
PFG Website: https://www.pfgprivatewealth.com/
Contact: 813-286-7776
Email: info@pfgprivatewealth.com
 
Disclaimer:
Speaker 1:PFG, Private Wealth Management LLC is an SEC registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk and unless otherwise stated are not guaranteed. Be sure to first consult with a qualified financial advisor and or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance insurance. Products and services are offered and sold through individually licensed and appointed insurance agents.
Marc Killian:In this episode, we're going to dive into some famous words from Yogi Berra. We're right in the heart of baseball season, so it seems fitting to do a little classic wisdom from Yogi and some financial lessons here with the guys. This is Retirement Planning Redefined with John and Nick.
Speaker 3:The rules of retirement have changed. No longer can most of us rely on social security or a single pension to fund our futures. We're living longer and retirement doesn't just last a handful of years anymore. Instead, you might stay retired for 20 or 30 years and maybe even more. We need to look at retirement through a new lens with fresh eyes, with a new approach and plan of attack. Here to answer the call are financial advisors John Teixeira and Nick McDevitt of PFG, Private Wealth Management, serving you throughout the Tampa Bay area. This podcast is Retirement Planning Redefined, and it starts right now.
Marc Killian:Hey, everybody, welcome into the podcast. Thanks for tuning in to the podcast here with John and Nick and myself. And I don't know why I said podcast twice, but I did. Thanks for hanging out with us and we're going to talk about Yogi Berra. We're going to take the fork in the proverbial road, and have a conversation with the guys and just get some financial lessons from some classic Yogi-isms. This guy had some great, great, great quotes through the years. Fantastic baseball player, obviously a legend, but his quotes were pretty good as well. So we're going to talk about that this week here on the podcast. What's going on, Nick? How are you, my friend?
Nick McDevitt:Doing pretty good. Getting over a little bit of a cold, but finally turned the corner.
Marc Killian:Yeah. Okay. I know you're a football fan. Are you a baseball fan as well?
Nick McDevitt:I grew up a big baseball fan. My grandfather... My mom's side of the family is Cuban, so baseball's a huge deal. And I grew up a Mets fan, which is torture, but really kind of phased out of baseball probably over the last maybe seven, eight years, harder to kind of hold the interest.
Marc Killian:Gotcha, okay. All right.
Nick McDevitt:Yeah, but did grow up really enjoying baseball.
Marc Killian:Nice, nice. Well, John, how are you doing, my friend? And what about you? Did you enjoy your baseball growing up or are you a fan?
John Teixeira:More of a basketball and football fan, but no. Growing up in Boston, you kind of automatically get sucked into the Red Sox aura. Growing up, I could understand Nick's pain, but then they kind of pulled through as in my college years. But I will say I'm excited. The Celtics is just won the NBA Championship, so-
Marc Killian:This is true. Again, yeah.
John Teixeira:That's a good thing I'm happy about so.
Marc Killian:Yeah, and they've got quite the team, so there's a good chance you might see them again next year in the run for it as well.
John Teixeira:Yeah, yeah, let's hope so. Let's hope so.
Marc Killian:They're stacked pretty well.
John Teixeira:Marc, real quick question as we talk about football is what do you think of Drake Maye? He was there in North Carolina.
Marc Killian:Yeah, it was interesting. Curious to see how he's going to do. I don't know. I mean, he played pretty well here, so we'll see how it translates. When they go to the NFL, you never know, right? It's a crapshoot. Didn't work out so well for Trubisky when he went to Chicago.
John Teixeira:No, it didn't. No, it didn't.
Marc Killian:So we'll see how it goes for Drake, but let's get into some baseball here. We'll talk about some Yogi Berra Again, this guy had some classic lines here, so this should be a little fun. And really they're kind of fitting not only to just finance, but just our world seems today. Yogi's been gone for a while now, but these things kind of fit with our society and the crazy world that we're living in. So let's jump in. Whoever wants to take this first one here. Pretty apropos considering what we've been facing the last couple of years, when Yogi said a nickel ain't worth a dime anymore. Boy, that's the truth, isn't it? Right now?
John Teixeira:Yeah, that couldn't be any more true than right now in the kind of time we're in. Inflation over the last few years, really, post COVID has just gotten, ramped it up with the supply chain issues and then the influx of cash going in. It's just a double whammy with what's been happening and as it relates to planning, I've seen a lot of clients happen to really pick and choose what they're spending money on because primarily the cost of food. And I could tell you myself personally, I feel like my food bill has doubled, but not 6 or 7%. I feel like certain things have doubled in the last few years. So inflation is a big thing you got to be aware of when you're doing your finances. And then here in Florida, and Nick can speak to this, and what we've seen is the homeowners insurance is outrageous.
Marc Killian:Oh, I bet. Yeah.
Nick McDevitt:Homeowners and car insurance have really been a huge, basically like a rocket ship. As far as expenses, John mentioned the groceries. One of the things that we do from a planning standpoint is, especially in times like this, I think where some people kind of make a mistake is they start to really mess with the inflation rate that they use in the planning instead of just repricing where their expenses are now versus where they were maybe a couple of years ago. But from the standpoint of between groceries, car insurance, homeowners insurance, we have a huge section of clients that those numbers, those three categories specifically have probably doubled in the last three or four years.
Marc Killian:After the hurricane a couple of years ago, I imagine some of that got worse too, yeah?
Nick McDevitt:Yeah, but we have hurricanes every couple of years.
Marc Killian:That one was just obviously pretty massive.
Nick McDevitt:For sure. And the hurricanes have a big impact on the car insurance. So a lot of people-
Marc Killian:Right. That's what I was thinking. Yeah.
Nick McDevitt:... yeah, don't necessarily think about that per se.
Marc Killian:All the flooding and stuff, yeah.
Nick McDevitt:Yeah. Some of the other laws that are in the state of Florida based around insurance make it on the higher side in general, but companies have really ramped those up.
Marc Killian:Oh, I'm sure. Yeah.
Nick McDevitt:I think Citizens, which is kind of the insurer of last resort, which is state-backed, just I think applied and got approved for, I want to say a 14% increase. So there's a lot of pressure on people right now, especially in Florida.
Marc Killian:For sure. All right, well a nickel ain't worth a dime anymore. Yogi had that one, right? How about this one, guys? I mean, you got to love the simplicity of his lines. If you don't know where you're going, you might wind up someplace else. Yeah, I mean if you don't know where you're going, you could end up someplace completely different.
Nick McDevitt:Yeah. It is funny when reading through some of these how apropos they tend to be and how they line up from an industry standpoint where having a plan, having stated goals that you're working towards, having a clear vision of what it is that you want in retirement, make a really huge impact on your habits and overall the probability of having a successful retirement. So these quotes have really kind of stood the test of time.
Marc Killian:Oh, for sure. Yeah. Johnny, he said the future ain't what it used to be. And again, if you think about the world we're living in right now, how many people of a certain age are like, "Man, that could not be more true." But even from a society standpoint, but also even just in what you guys do, it's not what it used to be when it comes to finance and retirement planning, even just a couple of years ago.
John Teixeira:Things have changed drastically. You look at my parents, they worked for the most part at one place, had a pension, retired, and it was pretty easy for them from a retirement standpoint. They had to really keep their expenses in check. But when they retired, it was Social Security, pension, luckily cost of living adjustments on both of those things to keep up with what we discussed there with inflation, but it was much easier. But what's happened throughout the last, I'd say 10, 15 years, maybe 20 years or so, as the companies have been putting the risk onto their employees to say, "Hey, you know what? We're not going to do the pension anymore, but we'll still give you a benefit. But retirement, your investment is now going to be your responsibility."
"While you're working to make sure you're investing the right amount and picking the right options, and then while you retire, now it's on you to figure out what's the best solution for supplementing your retirement income." So it's definitely ain't what it used to be, which is very important to make sure that when you do retire, it's a different game where it's not accumulation. You have to realize that money needs to last throughout your retirement and you have to put together different strategies to make sure that it does do that, not just like you have a pension that's going to guarantee for life so.
Marc Killian:Yeah, all the changes to the Secure Act, both versions, clearly the onus is more and more things have been put saying, "Hey, this is on us to do what we got to do for our futures here." And they're putting some rules in place to kind of help out a little bit, but at the same time, if you're not reading the tea leaves, you're going to get left behind there. And that's why you got to work with a financial professional to really help you get sound advice so that you can be set for retirement. I should have segued it this way because, Nick, if you don't, it's going to be like deja vu all over again, which is another Yogi-ism, which is classic.
Nick McDevitt:Yeah, it's things changing rapidly. It's interesting because there's always kind of the perspective of zoom out. We talk about that a decent amount where from a smaller sample size or even if we look at things from a micro standpoint, yes, the way that the tools in investing change rapidly or have changed quite a bit in the last few years, how AI is coming along and what the impact of that's going to be and those sorts of things.
But when you zoom out, these things are cyclical. So even though the technology may be very new and the way that maybe things react are different than they were before, there's been other times in history where the technology at that point has been new and the way that things react are different. And there's a lot of different quotes out there about how history is really kind of the greatest teacher. And when you zoom out, so many of these things have happened before. The subplots are different, but so many of these different things have happened before. And it kind of goes back to having a good plan, having the ability to adapt to what's going on, kind of not painting yourself in the corner because really the only certainty that we have is change. So it's pretty wild.
Marc Killian:That's a good point. And John, I think for this kind quote was like deja vu all over again. Most people kind of feel that way about the market. It's like, "Oh man, here I go again." Especially if you got burned at any time for any amount, it's like even a little dip here or there. And it gets you a little panic, especially if you are over 50 because you start thinking, "I can't afford to get rocked again." Even though... And the weird thing about the current time that we're in is news is always changing and always causing issues, but sometimes this market kind of just kind of rebounds and you think what's going to be the next thing that does it? And soon as you think it's going to happen, it doesn't happen. So it's very hard to read right now.
John Teixeira:Yeah. Yeah. It is definitely hard to read because people... Just looking at clients, it's, "It is now the right time to put money that's been on the sideline to get back in?" And it's always hard to determine when that is and try to time things. It comes back to the kind of fundamentals of staying the course and not really panicking depending on what's going on. Because like Nick said, there's always going to be something happening. Things may change a little bit, but there's always going to be something happening in the world. So you stay the course, stick to the plan, and you find those people do much better than the ones that kind of jump around based just looking at behavior.
Marc Killian:Okay. Well let's wrap it up here with a final Yogi-ism, for us sports fans of any kind for your team if they're not doing well, it works appropriate for that, because it ain't over till it's over. And that's pretty classic line for any kind of sports mantra. You still got a chance maybe to come back in. I mean, just look at what's going on right now as you guys are in Florida with the Stanley Cup, right? So we're taping this episode here before the final game seven's going to happen, and who would've thought that being up 3-0, Florida would mess up and allow Edmonton to get back in it and tie it up and go to a game seven? So it's not over until it's over, depending on what your viewpoint is, and I guess you could say the same thing from a financial standpoint. If you've made some mistakes, it doesn't mean it's completely over. Get a strategy, start working on it.
Nick McDevitt:We've had kind of conversations recently with people where there's been a good run. COVID was an up and down year, but outside of the market drop in last year, which a lot of people have almost forgot about, things have been good, really post recession, Great Recession. So we're talking 10 plus years at this point, and some people have kind of taken a step back and some of these changes that are happening with the inflation that we talked about and maybe a little bit more volatility, we're in an election year, all these sorts of things. It's important to make sure that you keep updating, try to stay on top of things, don't necessarily just kind of check out. So I think it's important to stay engaged and involved.
John Teixeira:Going through the ups and the downs of planning, talking about the Stanley Cup here, you want to make sure also when you're building a plan, you want to stress test things to understand when things do really get tough, what is your plan going to look like? So we just did this with a few of our clients where we test market downturns. Things have been good for a while. What happens in your plan if all of a sudden we have two years of negative 15, negative 20%? How does your plan look? If it doesn't look good, what are we going to do to adjust it? You can stress test it with taxes, inflation. Just making sure that whatever happens, whatever scenario you run in, you're flexible to adapt to it. And if you currently can adapt, making sure we understand how do we make you adapt.
Nick McDevitt:And even just to kind of add to that, and this ties in with some of the things that we had already talked about. A little perspective is always good from the standpoint of three years ago, four years ago, whenever we were a couple of months into the pandemic, in reality this was an event that most of the people alive had never been through before. Everything changed and then there's still obviously fallout from it, but we got through it. And when you think about it from a planning perspective and markets and all that sort of thing, sometimes taking perspective of what you've actually been through, what you've seen, and the fact that we were able to move through it is really important.
Marc Killian:Yeah, for sure. I mean, when it first started, the market first started dropping, that initial bit there, people were having the reaction that we're going to see it drop 50% like it did in 2008 or '09. It wound up maybe being 30 or so percent. But then it also rebounded within just a couple of months, so a lot faster than people thought. So it is not over till it's over. So these are some good Yogi-isms, and it all kind of works really well with financial planning and strategizing. So if you need some help with that, make sure that you're reaching out to John and Nick. If you're already working with them, that's fantastic.
Make sure you subscribe to the podcast. If you're not, maybe share the podcast with others who might benefit from checking out the message and the conversation. And you can find them online at pfgprivatewealth.com. That's pfgprivatewealth.com. And you can subscribe to Retirement Planning Redefined on Apple or Spotify or whatever platform you like using. Just type in Retirement Planning Redefined or again, visit them on their website for all the tools, tips and resources at pfgprivatewealth.com. Guys, thanks for hanging out. And John, good luck with the new puppy you got.
John Teixeira:Thanks, appreciate it.
Marc Killian:Appreciate it. Nick, hope you're feeling better, my friend. We'll see you next time.
Nick McDevitt:Thank you.
 

Retirement Questions The Baby Boomer Generation Is Asking

Each generation is currently navigating a unique part of the retirement planning experience. With many baby boomers preparing for the transition into retirement, we're going to focus on some of the top questions this age group is asking in today's episode. Stay tuned to see what you can learn from John and Nick this week on Retirement Planning Redefined!
 
Helpful Information:
PFG Website: https://www.pfgprivatewealth.com/
Contact: 813-286-7776
Email: info@pfgprivatewealth.com
 
Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.
 
Marc:
Every generation is currently navigating a unique part of retirement planning experience. No matter what generation you're in, there's going to be different questions that you might want to tackle. So on this week's episode, we're going to talk about that from the baby boomer standpoint, here on Retirement Planning Redefined.
 
Welcome to another edition of the podcast, folks. Retirement questions that every generation should be asking themselves is the docket this week, and we're going to touch on the baby boomers. We may come back around to some of the other generations right now, but I think for most of our listening demographic, the boomers are certainly going to be ones that want to pay attention. It's interesting, guys, the boomer term has become polarized. It used to be one thing to say just baby boomers or whatever, but now they get a little offended, I think, with the whole boomer thing. It hasn't gone very well on social media the last couple of years, but either way, we're going to talk about that demographic from 1946 to 1964.
 
It's so funny with these age things, they keep changing it. I was looking at the one for generation X, which is what I am, and now they're saying late '70s when it used to be like '83 or something. So I think they just changed these numbers based on what they want to have happen for conversation pieces. But anyway, we're going to get into that with John and Nick this week. What's going on, John? How you doing, buddy?
 
John:
Doing all right. Actually getting ready for, Nick and I are bringing some Easter baskets to the local children's hospital here. We're going to be handing them out this coming up Friday.
 
Marc:
Oh, very cool.
 
John:
We're excited for that.
 
Marc:
Yeah, very cool. That's nice, you guys are always doing some cool charity things going from around the area, so very, very cool. What's happening, Nick? How are you doing, buddy?
 
Nick:
Good. Staying busy, along the lines of what John was talking about, the group that we're involved in, we're working on a big derby party here in St. Pete, so big event. So that's fun to works the other side of the brain, and then we're just staying busy with... We've got one thing that's been interesting, John and I were talking about it earlier, this area is growing pretty rapidly, and it feels like we've had more clients than ever that are looking to move out of the area and slow down a little bit. So, it's starting to become a little bit of a trend recently, so.
 
Marc:
To move away from Tampa?
 
Nick:
Yeah, yeah. Move away from Tampa or further out to more of the outskirts of the area, but we've had some clients recently like Panhandle, Georgia, North Carolina. The growth here has just been pretty overwhelming.
 
Marc:
Monstrous, yeah.
 
Nick:
Yeah, and-
 
Marc:
There's a lot of states that are that way, right? I mean, there's a number of states where I think people, everyone's flocking from places like New York and California, and it's just like, okay, stop. We can't handle it.
 
Nick:
Yeah, it's interesting because this area, the east coast of Florida has always been like the Atlantic coast south, and then the west coast of Florida where we are has always been a little bit more low-key. Still a decent size, but a little bit more low-key, and it has that feeling like developers and everybody is trying to make it more similar to the East Coast. I think that's kind of pushing some people out, but even because obviously Texas has been a place that's been a popular area for people to move to for some of the similar reasons, whether it's taxes or just how the government runs or whatever their reasoning is. But one of the biggest differences, just reading about Austin, which is I would say Austin's most similar to this area in certain ways from a size perspective and all that, but they've had a huge drop, cost-wise in housing because they've been able to maintain supply. Whereas the housing here is just completely insane at this point, especially in St. Pete.
 
Marc:
I was going to say, across the country, it seems like it's really inventory's low. So, just a lot of people that just aren't selling, well, because the prices of houses through the roof, so you're not selling the one you're in because you know that when you buy another one, it's going to cost you just as much or more. So, it's interesting.
 
Nick:
For sure, that's definitely had an impact. This area specifically because of the influx, there's also been some interesting articles about how much corporate owned, single-family housing there's been. But I mean, you're talking 11, 1,200 square foot houses in St. Pete for 800 and up, [inaudible 00:04:23] how things shift.
 
Marc:
It was on my list, a roundabout way to talk about some different questions that every generation should ask themselves. So housing certainly can apply to any generation. I mean, even folks in our baby boomer conversation today could have been thinking about downsizing or whatever the case is in retirement and that certainly could play into that question. So that's one we tackled without really even setting it up to tackle it. So we'll just jump in and talk about a few more of these things.
 
But again, with everything being so wild right now, it seems like from a financial standpoint all across the spectrum, whether it's inflation, housing costs, food costs, whatever the case is, how do you manage all that? So risks, whatever risks guys, is going to be top of mind, especially if you're a senior. My mom is 82 going on 83, and she's constantly worried about the various different kinds of risks that may affect her at that age. Market volatility, social security, whatever it might be. So let's just start with the market volatility. Whoever wants to take that one.
 
Nick:
Yeah, so from a market volatility standpoint, it's very interesting from the perspective of how things seem to work these days from a market perspective. I don't have the exact numbers, but I know last year, essentially needed to... The majority of the growth in the market, although we had a great year, the majority happened within a seven to 10 day market window. So your chances of if you're not just holding and studying the market, your chances of really getting the returns that you're looking for are very difficult. So volatility, the swings up are substantial and the swings down can be. I think a lot of that has to go, can be attributed to the algorithm based trading and high frequency trading and things like that have an impact on that.
 
Marc:
And if you're a senior, none of that interests you, right? So I mean, that's [inaudible 00:06:18].
 
Nick:
No. No. Yeah, absolutely not. But for a lot of people in that generation, they're used to the returns being more steady throughout a single year or the perception from that perspective at least versus like, hey, if you miss a month and it was a good month, then your returns could be next to nothing. So it's pretty interesting.
 
Marc:
Yeah, managing that risk, for sure.
 
Nick:
Yeah, it goes back to that classic perspective of the asset allocation continues to be as important as ever.
 
Marc:
Yeah, for sure. John, if you think he just mentioned steady income. So if you're a senior, best approach for transitioning from a steady income like your job, for example, to retirement withdrawals, that's usually a massive hurdle for anybody going into retirement but obviously right now, these are the boomers. I just read actually today that we're taping this guys, I think four million people were going to be retiring this week, four million this week.
 
John:
It's a good number.
 
Marc:
Crazy, right? So, how do you deal with that scared-ness of, okay, I had a paycheck last week and now I don't, I got to use my retirement money and turn that into paychecks. That's a big hurdle for people.
 
John:
It's a huge hurdle for people. This is one of the biggest things we see when we're doing retirement planning for clients that are transitioning. It's, I used to work and get my paycheck every biweekly, whatever it is, and now it's gone. There's a fear of spending their money they've been saving all these years. I'll tell you, the best thing to do in our opinion, is to develop a financial plan and a strategy for retirement income. So you really have to put the pen to the paper and determine, okay, what are my expenses? How much do I need? That's going to be the first step. Then after that, it's looking at, hey, what are my income sources? We talked about social security last week, we'll touch on it a little bit more here, but hey, how much is social security going cover? Okay, what other sources do I have? Really evaluating where's the money going to come from? Once most people see it, it provides peace of mind and a little bit of, okay, this is what I'm doing. You got to have the blueprint. Once the blueprint's there, you feel much better about what your approach is.
 
Marc:
Well, we all want to know we got mailbox money coming. We all want to know that when we go out, and I know most of us don't go to the mailbox anymore to get it right, but it's the same idea that when you go open the mailbox, the check is there. That's what you need to know. That's that comfort factor that you need to know. So that's turning these accounts that you've been building up through your working years into this retirement income. So certainly, that is an importantly huge question for baby boomers to ask themselves.
 
We're talking about wealth and building wealth and working through the years. Nick, I'll throw this one at you. I'm going to hop around here a little bit, but passing on wealth to the next generation without sacrificing your own retirement, is also another huge question that boomers are asking themselves because they want to know that they are going to be fine, but a lot of times they want to leave something behind. I just was looking this up real fast. Experts are putting that number between 40 and $100 trillion right now that they're estimating in the great wealth transfer conversation, which is what boomers will be leaving to their kids and grandkids over the next 20 years. $100 trillion. Man, that's crazy money.
 
Nick:
Yeah, it's pretty wild. What's interesting is I think the baby boomer generation has done a good job of accumulating assets and saving.
 
Marc:
Oh yeah, great job.
 
Nick:
There's also, I would say, versus maybe their parents' generation, they spend a little bit more. It's interesting, a lot of the people, I wouldn't even call it half-and-half, maybe around 30, 35% or 40%, leaving money for them is incidental, where their focus is primarily on themselves. A lot of times these are people that have done a good... They've helped the kids get through college, kids have good careers, and-
 
Marc:
Right, we've saved it, it's ours, let's party, right?
 
Nick:
Yep, so they want to travel. Obviously travel is the most popular thing that people tend to want to do. So having that conversation changes things. For those that are highly focused on leaving the money, and what's interesting is where I've seen it happen a little bit more is because people like to, in their mind, it makes it easier for them to segregate money. So we've had a few recently where their retirement plan looks good, their thought process with the money that they have saved and accumulated and leaving it to their kids is incidental like, hey, if there's money there, great, if not, we want to take care of ourselves first. But, they've also inherited money maybe from their parents or a brother or sister, and they say, all right, well this is going to be the money. I consider this found money, and so this will be money that I'll try to leave and pass down. So it's been interesting seeing that thought process.
 
But with the way that current estate tax exemptions are from a tax perspective and avoiding estate taxes, that sort of thing, for most people, that's not an issue. But for those that are, maybe they've got kids that are high-income and they would like to leave them money that has less of an impact from a tax perspective, depending upon their situation, we might look into life insurance options or even converting to Roth options to help them pass on money and not have a major negative impact to their overall plan.
 
Marc:
Yeah, because you want to figure out how to... If you do have it in your mindset to transfer some wealth upon passing, and I think probably the healthy approach that a lot of people take is, we're going to do what we want to do, we're going to be fine, and whatever's left at the end, fine, transfer that over to the kids or grandkids. You want to make sure that you're doing that as efficiently as possible. So some strategizing there is certainly going to go into play.
 
John, I'll throw this back to you, whether it's leaving money behind or even how you set up your social security, because you talked about it a minute ago and readdressing social security. Maximizing social security could impact what you do have left over at the end to leave behind because that's not something you can pass on. So it's a matter of figuring out how you want to structure these things to maximize your benefits and get everything out of it that you can while you're still here.
 
John:
Yeah, yeah, if you're able to maximize your social security and figure out what's best for you, what that ultimately does is you're dipping into your own investments a little bit less because you have that strong social security income stream. So if there's more investments left over, your beneficiaries, whoever your beneficiaries are, will have a bigger balance coming to them. So definitely, we talked about it before, we always stress on it. You don't want to take social security decision lightly. You want to make sure that you're strategizing for your situation on how to maximize those benefits.
 
I believe it was last week that we talked about the cost of living adjustment in social security. So if you delayed yours, people have been getting 6% or 7% increases, and if you were taking yours later, you get a bigger balance. Those 6% or 7% over the past few years have really added up. So, very important to make sure that you take what's best for you in social security and not just take it lightly. I hate to say this, but you don't want to listen to your neighbor on what they did because you'll be surprised how many times we're meeting with people, it's like, my neighbor's doing this, and it's just like, huh, okay, well-
 
Marc:
That's your neighbor, right.
 
John:
What does your neighbor do? Well, they're in tech. It's like, okay, well.
 
Marc:
It's a little bit different, yeah. Well, thinking about that social security conversation, so getting a maximization ran, going through the planning process, going through a strategy session with you guys, and having it stress tested and having that maximization ran will help you see that because that's a great point. Are you riding the horse that brought you, which is your retirement, or the government one? I know technically it's our money, the social security, the government, but it's like figuring out the best balance between those two when you're going to start pulling things from whatever account. So, good stuff right there to think about when you're talking about for generations. Go ahead.
 
John:
One thing Mark, with that. With social security maximization, a lot of people don't realize is there are these calculators that you can look at and say, hey, you put in your numbers, you put in a spouse's number, and it will shoot out, hey, this is the strategy, but it doesn't take into account other factors, as far as, do you have a pension? Things like that. How you want to figure out what's the best strategy is when you look at your social security and how it affects all your other assets and income streams, then you can figure out what the best approach is because when you just look at social security in a vacuum, there's other factors in there that really make a big difference on what the best strategy is. A lot of people will just go online, hey, what's the strategy, maximization strategy, but it doesn't give the overall picture.
 
Marc:
A great point, really good point right there. So let's wrap it up with one final piece here to think about, Nick. Of course, we could go forever on this topic, but we'll just... Some couple of concise points to think about when you're talking about addressing healthcare costs in retirement. Obviously for boomers, this is a huge concern, really for anybody, if you're alive and human right now on the planet. Healthcare is obviously growing out of control, but certainly a big concern when you're elderly.
 
Nick:
Yeah, I think, and this is almost a tiered approach. So the first thing or aspect that needs to be addressed is if you plan to retire before you're eligible for Medicare. So having a plan in place and understanding what those costs could look like. So for the majority of people, if they want to retire before age 65 and they need to get healthcare coverage outside of their former employer, then we tell them to typically budget between $800 and $1,000 a month per person. For most people, that's going to be a huge increase in costs. They might be able to float it and they also might be able to reduce that cost substantially if they have money saved that are non-retirement funds. So non-qualified accounts where we can keep their income on paper down and they might be able to qualify for a subsidy. So that's phase one.
 
Then phase two is, once you are eligible for Medicare at age 65, making sure that we're budgeting somewhere between 4,000 and $5,000 a year and having them talk to a person, and we've got a couple of resources that we're very happy with and we refer people to, because depending upon their overall situation. Again, if they, especially people that are coming from working for a large company that maybe had really good benefits and they're used to paying maybe a couple hundred bucks a month for coverage for themselves, that may actually be an expense that goes up.
 
Then the phase leading into those two things are, are you eligible for a health savings account at work? Are you putting money in? Then that money that is getting put in maybe something that we could use to help mitigate some of these costs and be efficient from a tax perspective. Then also help you cover maybe potential large, actual purely out-of-pocket medical expenses that start to approach and happen down the road when you get to your 70s, 80s, etc, where these things pop up. People live longer, whether it's some sort of acute care or if it's some sort of need for long-term care, which is expensive, but-
 
Marc:
Yeah, crazy 
 
Nick:
Really, the key to that is the overall plan, making sure that we test those numbers out in the plan and that we've got a strategy to approach it.
 
Marc:
Yeah, because if you don't take a strategy into account with that, if you're married and you're a senior and you're like, hey, we're going to just take care of each other because it's just going to be cheaper, it's a wonderful sweet and noble sentiment that has no basis in reality because it's just not smart. It's such a taxing physical thing, a mental thing, to take care of one another without having some sort of help in there. So you've got to plan and strategize for it, whether or not it is daunting to do, yes, but if you don't start having those conversations, it's only going to get worse.
 
I mean, my wife jokes with me all the time. I mean, I'm 52, and she's like, I can't pick you up now, I can't imagine trying to pick you up when you're 72. She's 70, it's just not going to work. So you've got to have a good strategy for healthcare to address the rising cost because it is going to continue to do so. Again, these are some questions for boomers to really think about and ask themselves.
 
If you need some help, if you need to sit down and start that planning session, that strategy conversation because you've been putting it off or you've addressed a few things, not all the things, whatever it looks like, reach out to John and Nick and get yourself onto the calendar at pfgprivatewealth.com. That's pfgprivatewealth.com for a consultation and a strategy session of your own. Don't forget to subscribe to the podcast, Retirement Planning Redefined on Apple, Spotify, Google, YouTube platforms, whatever, you can find us on all those major platforms. Just type into the search box, Retirement Planning Redefined, or again, go to pfgprivatewealth.com. That's going to do it for us this week for John and Nick, I'm your host, Mark. We'll catch you next time here on the podcast.
 
 

Don't Make These Income Planning Mistakes

Are you planning for your retirement with the confidence that you're making all the right moves? In today's episode, we'll unveil the crucial income planning mistakes that could jeopardize your retirement and show you how to craft a financial plan that's built to last decades, not just years. Tune in to ensure your retirement strategy is foolproof against common pitfalls and ready to secure your financial future.
 
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Disclaimer:
PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.
Transcript of Today's Show:
For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/