All right. Evening everyone. Hope you all are doing well. We still have a couple of minutes. People are joining.
So, we’ll give them a couple of minutes.
I’m not sure what states everyone are joining me from, but in Texas we just started early voting yesterday for our midterms.
So, hopefully everyone’s getting out there, at least planning to get out there and vote.
So, I have this right at 6:00. We’ll have some time today, so we will uh give it a couple more minutes as people are still joining us. It’s always good to see some familiar names on here, a lot of new ones.
Is anyone coming uh joining me from up north? Like anything north of Well, say north of Texas, but where the weather’s actually cold. We’re finally getting really, really nice weather here in Texas. I assume Florida and I assume Florida is the same. Where where we’re in the 50s in the morning and today was in the 80s, so it was really kind of a glorious time. North Carolina, yeah, okay. Vermont. Ah. I bet. So, are the So, in Vermont, are the leaves turning right now?
Cuz that is spectacular to see. Yes. Yeah, that’s something that is something to behold if people have never seen that. That was actually pretty cool to do that.
All right. We’ll give it maybe 1 more minute or so and then we’ll get started.
Yeah, my sister my sister lives in Pennsylvania. Out in Lancaster, so like my nieces and nephews are in Philadelphia, but they are but she’s she’s in Lancaster in Amish land, so supposed to go out there and visit everybody next month. She’s like, “Hey, you’re going to bring a coat?” I actually had to turn the heater on. Like, “All right. I’m pretty sure I was going to bring a coat well before you decided to turn your heater on, but um My family’s originally Hawaii. So, when they would come to the mainland, they would always talk about how freezing cold it is in Southern California and I always thought that was funny, right? Weather is always uh
it’s always so subjective.
All right. I have 6:02. Uh and it looks like folks are still joining, but we are we’re going to go ahead and begin in the interest of time. We still should have plenty of time to go through this and some time at the end for Q&A. Uh, but officially, I want to welcome everyone. And if this is your first time joining me, then an extra special welcome. Uh, I’m Michael Marks, certified financial planner or CFP. I’m one of the uh financial consultants with Alliant Retirement and Investment Services or ARIS, A R I S for short. I live here in Houston, Texas. Um I have been affiliated with the credit union since longer than I’ve been alive. Uh, so my family, who came from United, and as you know, Alliant is United’s credit union. We changed our name because we added Google and Tesla and CVS and Suze Orman and other things. So so it’s a little bit broader, but we’ve been around for over 90 years. So for those of you who have come through us from different channels, welcome everyone. Today, we’re going to talk about the uh fragile decade. And that’s that’s the five years before retirement and the five years after retirement.
So before we do, my usual quick housekeeping item. Today’s session is for educational purposes and includes proprietary material. So to protect both the content and everyone’s privacy, we ask that attendees please do not record, capture, or capture the presentation, whether it’s by video, audio, screen sharing, or AI tools without prior consent. We appreciate your understanding. And with that, let’s dive on in. Though um I’m not sure if you joined this webinar via an email that you received directly from our division, uh or if you signed up directly through the credit union’s website. Uh so you might be familiar with Align Credit Union, but not so much ARIS. So maybe we’ll take a couple of minutes and just talk to you about ARIS. So in addition to the weekly webinars we host, we are a full-service wealth management and investment planning division of the credit union. Um So we do the whole thing as far as the complimentary in addition to these, we do the complimentary financial planning, like I said, we’re fiduciaries, I’m CFP, uh estate planning, as you’ll see on another slide, we recently added trusts and will services, power of attorney, uh advanced medical directives, etc. As far as products go, it’s full range, many of which are uh without a fee. So advanced planning, Roth conversions, you name it, we probably do it.
So speaking of our trusts, this is something that we’ve just recently added. Uh so if you don’t have those in place, right? Not everybody necessarily needs a trust, but everybody should at least have a will. If you don’t have a will, that means the state that you live in wrote one for you. So you do have a will. So hopefully it would be by having one, it would be under what your desire is for your assets after you pass away. So whether it’s a will, trust, power of attorney, living will, that HIPAA authorization, we’d be happy to help you with that. Um so regarding our webinars, you can find a list of our weekly webinars, and we do these throughout the week with different topics and different presenters. Uh you can find me directly at our website, which is aris.aligncreditunion.com. Uh or you can just go directly to the credit union website, and then our tab is in the upper right-hand corner, and it says retire and invest. But there you can find our blog, which is Invest Savvy Savvy, sorry. Uh and some other financial resources on there.
So, we normally do two a month as far as each advisor. So, my next one I’ll do one in the evening and one in the afternoon. So, obviously this is my evening one. And my next one will be November 4th on a Wednesday at 2:00 Central 3:00 p.m. Eastern. And we’ll be talking a little bit about long-term care and and this is actually uh I don’t know how exciting this topic is, but it’s actually pretty interesting, you know, and I think this is probably one one of the biggest potential hazards, right? That could de-derail your retirement plan. Nobody loves talking about this, but I do think it’s pretty important. And whether you decide to have any or not, this is not a pitch to sell long-term care insurance to anyone, but there are many different types of plans and actually self-insuring is a plan. So, back in the evening on November 17th, that’s a Tuesday, we’ll be back there or I’ll be back at 6:00 Central time and we’ll talk to you about trusts and why you may or may not want to consider them as part of your estate plan. The quick disclosure, this presentation’s for general information and educational purposes only. It is not a recommendation.
So, this is today’s storyboard. So, this is what we’re going to cover today. So, what’s the fragile decade? Why it matters. And how to make it work. So, what’s fragile decade? So, first, let me take a step back and share with you how this fragile decade concept came together, right? So, the company that this together, they had worked on this for a year, and what they did was they sifted through retirement articles, surveys, research documents, etc. Literally thousands of pages of research on retirement planning. And when they laid this out in front of us, you can see, right? There There’s just many different titles uh on 10 things you need to do when you retire, the 10 biggest mistakes, happy retirees do this, retirees, etc., etc. I’m sure you’ve heard of those very same articles. Now, there’s this commonality in all of those, but there’s some huge disconnects as well. So, what we did was we needed to find it, maybe synthesize it, make it a little more productive for the members here. So, whether the major life transitions, you know, like retirement, divorce, widowhood, inheritance, like selling a business, etc.
The foundation for putting this together, right, in a structure, is understanding the four phases of life transitions. And so, no matter what that life transition is, there’s this distinct pattern on how we internalize and respond to each one of these milestones or life-altering transitions. So, the four phases here are anticipation, ending, passage, and the new normal. So, obviously, in the event for this one is going to be retirement, right? So, your your anticipation is the moment you become aware of the possibility of the event, and your personal narrative begins to shift, right? You’ve entered that anticipation phase. So, the ending, that’s some aspect of your life as you know it that’s really come to an end. So, passage, we’re going to we’re going to refer to it as numbness or shock um or something be a sense of awakening, right?
situation is either gone or changed significantly. Um And this And this part is really about the adaptation. And And frankly, a lot of people have a very difficult time with this when it comes to retirement because we’ll talk a little bit a little more specifics on this. But But it’s one of those things that we’re defined Many of us were defined by our job, right? That’s who we are. Um And this is the time we have to let go of those old ideas about your life and explore new ones, right? And you And you’re kind of inching forward toward a new normal. And this doesn’t happen overnight. This can take weeks or months or for some it’s even years. But this is the longest stage of these transitions. So, once you get through that, you arrive at the new normal where you know, you’re living your new life, you’re fully integrated in the events post transition. Um And you’ve kind of arrived at let’s just say the best possible outcome, right? And accepted the event as part of your new personal narrative. So, these phases are important to understand and to consider when you’re working through this process, right? Or at least being cognizant of this process. So,
So, because the tran-the transition that we’re talking about today is retirement, I would say the best way to view retirement is it’s really not a destination, right? People are like, “Hey, I’m working and then I’m retired.” And And then what happens? But it’s more of a journey. So, it’s how you prep before that and how you transition into your new journey. So, when you look at it that way, I think you’ll We can look at it how it aligns with the four phases. So, with that in mind, welcome to the fragile decade. Right? And it’s simply defined as the 5 years before retirement and the five years after your retirement. And the reason that we’ve titled it the fragile decade is that in when you look at the research and the studies, investor interviews, that this is the period where people feel the most financially and emotionally fragile. Right? As they enter that anticipation stage, there’s a lot of angst. Do I have enough? Is this the right timing? What will I do? You know, what’s the sense of purpose? So, there’s some distinct commonalities of this. And that unknown is what causes a lot of anxiety. And hence the fragile mindset. So, this this evening is really designed to help you prepare for probably one of the biggest transitions of your life. No pressure there, right?
So, let’s talk about understanding it from this perspective, why it matters.
So,
it’s a fragile transition for all involved, right? So, not just you, but your spouse, your family. So, what stat really caught our our attention was a depression stat. So, clinical depression goes up by 40%after retirement. Right? So, these years are really precious, right? So, that depression, we kind of look at it as often times it’s associated with the a loss purpose. So, that’s why being able to prepare for this five years before, it makes the transition much, much smoother, far less difficult. I’m not sure if you’ll be 100%prepared for retirement, but at least being prepared most will make that transition much easier. Right? So,
when you look at actuarial mortality tables, right? People entering retirement today can expect to live 20, 25, 30 years. That’s, you know, it could be like a 30-year lifetime. But that also means that 2/3 of your life has passed. So, if you put that in perspective, if you were a 65-year-old who retired in the 1960s, right? Does anyone know on average how many years you would have lived in retirement? So, that’s a 65-year-old who retired in the 1960s. So, have that answer in your head? So, the answer is 4 and 1/2 years. So, if you retired in the 1960s, your average retirement was 4 and 1/2 years. So, when you think about it from that perspective to now, when we’re looking at 20 to 30 years, and pensions have long since gone by the wayside for most of us. You can understand where that angst going into retirement might might weigh pretty heavy on people. So, helping you plan your lives in retirement is really beyond just the money aspect of it. That other aspect is really just as critical. Right? Money’s important, but what are you going to do when you’re there?
So, what we’re doing is we’re seeing a shift on how we work with clients in retirement. It isn’t really just a,”Hey, this what your allocation is. This is what you should do. Make these changes. Buy this, sell this, etc.” All right? It’s more of a experience-centric approach with your clients. Um you’re really going from like an investment consultant to more of like this life coach. Um and it’s not really just helping them with their assets, but whether it’s okay to do those things, how to develop that sense of purpose, how do you manage that change? So, it’s really become not a business of products, right? Stocks, bonds, etc. It’s really more of a business of people and then you work in you back in the products to match those goals, right? What kind of stocks, what kind of bonds, what kind of UIT, what kind of trust, etc. So, this conversation goes from making sure you’re financially ready for retirement to what you can do in retirement. So, for example,
what are your top priorities, right? Let’s help you check off that bucket list. So, to help add some context to your financial planning goals,
you probably a good place to start is is what’s that bucket list, right? What are those things you’ve always wanted to do? Maybe you want to see the northern lights. You know, maybe you want to go see the Hoover Dam.
Maybe you want to go back and look at where your ancestors came from, right? So, we’re not really your travel agent in that respect, but although I’ve done a lot of traveling and there are pretty good resources that we could be helpful on that. But, it’s really more about what you want to do when you stop working. And and this type of planning really helps those goals become relevant.
You should always talk about things that you want to do or create in retirement, right? Now, I can’t stress this enough. Not wanting to do is fine as long as that’s what you want to do. What we don’t want is for you not to have thought about that before, because this is a major part of your planning, right? So, it might be the creative something, right? Where you’re doing a vlog or sculpting, writing a novel. Maybe working with your hands, science and custom furniture. Whatever that is, there’s no right or wrong, but this helps organize your thoughts and then will help organize your plan and your goals on how you prep for your retirement.
So, maybe it might be something more in service, right? Volunteering more often, maybe doing mentorship, running to get your bond, grandkids, you know, maybe they’re close. Start a new charity, volunteering more, raising money. Maybe do little or nothing at all, work in your garden, tinker in your garage. Again, there’s no right or wrong. But, we do know this. So, there’s something that are called pillars of happiness.
And this matters, because this is the foundation of your happiness throughout your retirement. And there are four. So, the first one is money and it’s specifically income. Second is your health. Third is staying connected. And fourth is a sense of purpose. So, money, income. We’ll look at the first pillar. So, studies have found that people in retirement who have pre- protected income are happier, like social security. If you’re fortunate enough to still have a pension, that’s great. Some type of annuity. The Wall Street Journal came out with an article that they read, you know, the secret to a happy retirement is Well, the happiest people in retirement are surrounded by friends, family, and a protected income for life. And when it comes to your money and happiness in retirement it’s almost solely tied to income. And this matters, right? Because this is a really big transition for people to go from an accumulation phase to a distribution phase. So and people have a difficult time spending because they’re worried about running out. So they’ve had these studies on that show people with assets they gain, they lose, they gain, they lose, they’re a lot less happy than someone who just has like a pension or something like that. Because people are associating those losses with it will affect my lifestyle or something bad happens it can affect my retirement altogether. But the reality is you lose money in oil, you lose money in gas, you lose money in Tesla, maybe some kind of crypto, and then you gain. But those people I’m going to jokingly say are miserable, right? Because they’re living this day-to-day and they’re worried about the day-to-day movement. So the focus is on the loss or what you don’t have. So assets themselves
can kind of make people miserable in retirement if they focus too much on the daily value. So the focus should really be more on the income, not the asset. Because the asset will provide your income. Know that that asset will fluctuate. So because when you retire, your regular paycheck stops. So you want a source of income that you cannot live. And that’s really where the angst is, right? The up and down. So a little bit shorter, so health, right? Obviously, the better your health is, the more likely you’re you’re willing to say that you’re having a happy retirement. So, 80 80%of people who rated their health as excellent said they were satisfied with their retirement compared to 20%26% whose health was poor. So, when people have that potential to live 20, 30 years plus in retirement, you want to make sure that you’re healthy and you’re able to enjoy it. Now, obviously, some people we don’t have a say in that, right? Maybe there just are some general health conditions, but what I would say is, if you know this and you still have time, maybe you start working on things now and not waiting until you retire to say, “You know what? I’m going to get in better shape. I’m going to walk more. I’m going to eat a little bit better.” Start training for your retirement now. Not wait until you get until you retire. That healthy lifestyle is a quality of life so you can enjoy your life in retirement. So, staying connected. And it’s not necessarily through social media, right? But, not having much of a social life is really bad for your health, right? So, they’ve linked that low social interaction that is a greater risk of heart disease, uh increased risk of cognitive decline and dementia. So, stay happy and healthy in retirement. You should focus your ability to or your available the availability of maybe new relationships, nurturing existing ones, especially if your social life was revolved around work, right? Because what I’ve seen over the decades is that many people who retire, they have their work friends, and when they retired, they really thought those friends were always going to be around, but we found that maybe those relationships maybe weren’t as strong as they were and all that they had in common were work. So, kind of cultivate that. And it doesn’t necessarily have to have mean you have to find new best friends, right? But it’s being around people and interacting with people. So, the happiest people keep their family and their friends around. So, a sense of purpose. So, retirement frees up your schedule, right? And for some, that unstructured time can be a little overwhelming. So, if you’re not careful, having a lack of sense of purpose, right? Or that sense of responsibility, it can lead to boredom, which can lead to depression, and relationship stress. So, it can be especially true for those people who closely identify to their careers, right? Purpose is what we get out of bed in the morning. You know, we don’t we don’t want to confuse what we do with who we are. Especially when it comes to retirement, because what you do can cease to exist. I’m a financial advisor. That’s what I do. That’s not who I am, right? I’m a researcher, I’m a teacher, I’m a gatherer of information gatherer of knowledge. Um, I’m someone who’s curious about how the world works. So, being an advisor allows me to bring those things into something that I enjoy doing and being productive about it. The same thing is true when you go into retirement, right? Not what you do, who you are. What are those things that you enjoy and what are those types of activities that you can find during retirement that will give your retirement meaning. So, let’s put a timeline to this. So, we have a 5-year countdown. Let me add on time. Perfect. This is your conversational blueprint designed as a year-by-year countdown in checklist form. So, people live their life by checklists. Checklists make people feel organized when you create them and accomplish when you complete them, right? You got a list, you’re knocking that list out. So, once you enter this anticipation stage, and that age, obviously, as you can see, it’s 50 to 65. So, depending on when you retire, depending on what your retirement looks like, this can take a decade or so. For others, it could be relatively quick. So, we’re going to say 5 years, but this conversation can be much sooner.
So, you start your income plan conversation. You look for ways to help protect your profits if you’re about 5 years out.
Let’s review the average American’s budget and build one.
And then, you start annual spending audit and that spring-cleaning of that checklist, right? So, you read through the income plans. And And so, some plans, by the way, are best served opening certain types of accounts to use later down the road. So, So, that’s why we say,”Hey, 5 years out.” You want to start planning the sequence of your income, right? Whether it’s going to be Roth, whether it’s going to be cash, whether it’s going to be semi-tax deferred, like your 401k, maybe my brokerage accounts. And you know, there is this There’s this You spend Normally, it was you spend your your cash first, and then your taxable accounts, and your tax deferred. And that is not always the case. So, So, there’s a lot of moving parts to this in the sense that you still want to look at how the taxing of the taxation of your social security is going to impact you. The taxation and penalties associated with with with Medicare um or Irma, right? So, the taxation during your retirement, how you position those during that retirement as well as passing that on to your legacy, right? Your kids, your grandkids, whomever that is. Um and you know, that might be your withdrawal plan, right? Whether that’s that 4%, the bucket, the interest only, the hybrid strategy hybrid strategy, etc. Protecting profits, are we hedging against loss? Like I can’t tell you how many times I’ve heard a client say,”My account’s making money. I’m happy.”Okay. Well, what happens when, not if, the market goes down and down significantly? Are you unhappy? Right? So, you remember the earlier slide when we talked about people’s happiness being tied to the market or the unhappiness being tied to the market if it’s down. So, you want to insulate in that. You don’t want your happiness being tied to day-to-day movements on the valuations of your account. Just know that’s going to happen. So, you have different buckets.
So, 4 years to go.
Maybe looking at that long-term care, right? What that What’s that plan? Um hopefully you already have one in place. Um and and not having long-term care again could be a plan as long as you’ve evaluated your assets to assume that you’re just going to self-insure.
Some of those health care options, right? How’s that look? You know, if you’re not a government employee or or something like that, if you’re just going from the private sector, you’re going to need to start looking at what kind of Medicare supplement am I going to have? Cuz you definitely want one. Having Medicare on your own, generally speaking, it does not cover what most people are used to or would want. So, you’re also looking at those pre-needs, the estate planning, etc.
If I could get the slide to change. There we go. Um you know, this is when you’re starting to look at your ideas for the future, too, right? What are those goals? How do you position yourself for those goals? Are we going to be moving somewhere, right? Maybe we need to start looking to see I live in Houston, maybe I want to retire in the Keys, which I don’t, by the way. Um maybe I need to start scouting that out or maybe I want to move down to Costa Rica. My buddy started building a house down there because he thinks that’s where he wants to retire. So, so whatever that plan is, that plan might take a few years to get into place. So, be mindful of what that plan is for you. So, 3 years to go.
That’s where you look at where you want to live. Right? Are you staying where you’re at or I’m going um
if I have a medical condition, do I need to be near a hospital? Do I like that kind of weather? Am I going to stay there year-round? If I’m just going to stay here, are there major repairs? Does my house need a new roof? Does it need a new AC unit? Um do I need a new vehicle? Right? So, these are things where you might want to start looking at taking care of while you’re still working. And obviously, you keep doing your spring cleaning. And you rerun and you review your retirement income plan. Two years out. So So this has two years out where you start looking at your tax strategies. Now, I would say your tax strategies might start start much sooner than that, but we’re going to go with the case just for two years cuz that’s the average person is, right? So this might be something like your phased retirement. Call that practice retirement. And and that and that plan is do I go from 40 to 60 hours or whatever you normally work during the week to zero. Right? Is this something that are you ready to do something like that? You know, maybe you can talk to your boss um or your employer to see if that’s an option to say,”Hey, is there a phase down? You know, I still want to work here full-time, but maybe in a few years I might not want to do that or a couple years.”Obviously, proceed with caution, right? Because you don’t want them replacing you before you’re ready. Um but you know, that’s easing into retirement. The other thing you do during practice retirement is that you start looking at your cash flow. If this was your income goal, right, during retirement, see if you can live like that. See if that actually works.
Again, keep doing your spring cleaning, rerun and review your retirement income plan. Laws change every year. The market changes every year. Politics change every year. Well, politicians change every two years, right? Depending on where we’re at, but we certainly have elections every two years. So that final year, right? This is where you’re finalizing your health insurance needs. This is where you’re looking at your emergency fund, right? Any of those basic needs for given time, keep up that spring cleaning.
And again, this is something different, right? We want to review the dates to turn on that protected income source, right? Did you file for Social Security? Did you file that start date? Did you file the date for your pension, if you have something? Have you started looking at if you say,”Hey, you know what? An annuity is going to be part of my income.” What I do that? How do we get that in position? Some of them you have to wait a year before you start your income. So again, rerun, review your retirement income plan, and then review those last 5 years and see if you’ve missed anything, all right? Now, here we go.
That ending, throw yourself a retirement party. So, now that you’ve entered the ending phase, also known as retirement, now it’s about the next 5 years. So, it’s all about touchpoints, right? And navigating that passage phase, and continuing to look forward to your new normal. I would say this one’s important, right? Track your spending. Not for the first few months, for the first year, because money can be can be cyclical in how you’re spending, especially when you’re early on, right? How was your estimate? Were you close? Do you need to revisit your plan?
When you look at retirement, so not only just in that in that year, right? On how you spend. Through your retirement cycle, it doesn’t it isn’t flat, right? It’s it’s I mean, the best way I can describe it is kind of like an S-curve. So, in the very beginning, we find that your spending increases, right? You have more time, you have things that you wanted to do, but didn’t have the time to do them. So, your spending increases and your health is still relatively healthy, hopefully very healthy. So, then as you knock those things out, right? You’ll see some of your spending start to level off and maybe go down a little bit because you’ve done a lot of those things that you wanted to do. But then, just like everything else, your health and all the maintenance, house, cars, things like that, your spending will go back up again. So, it’s up, levels down a little bit, and then will tick back up. That’s a normal S curve on how you on how spending looks.
Now, I would say one of the things that you can do is if you have a mentor that, you know, maybe some people that you still kept in touch with from work, or some of those retirees, or parents, in-laws, whomever that might be, your older neighbor who’s already retired, talk to them. See if there’s something that that you’re like, man, they have a great retirement. What are they doing right? And And I’m a big fan of learning from others if you can, right? You learn from other people’s mistakes, so you don’t have to endure those. So,
So, the start an idea jar, I think it’s just one of those like, hey, these are things that I wanted to do, right? Start that happy retiree journal. And And look, journaling isn’t right for everybody, the idea jar isn’t maybe not right for everybody, but you know, talking about your thoughts with your family and your friends, and frankly, this is one of those things that you should talk to even before that, right? Um I had I had a member that we were talking to on on the things that she wanted to do in retirement. They were revolved around her kids. And I was like, well, and And she was describing the lives of her kids. I was like, wow, that They sound really busy. Have you talked to them? You know, as far as going on these family trips and things. And she’s like, yeah, you You I was like, this is really important that you might want to make sure that they are available to be able to do that with you. So, if your plan involves others, talk to those others and make sure one it’s in their plan and if it is, then then also they have the time. So, at this point, right? We’ve entered that ending phase.
So, whether it’s volunteering, whatever. This is where you want to constantly work on that and evolve on that, right? And and by the way, those plans might not be a forever thing. It might be, hey, you know, I’ve wanted to learn how to do this and fill in the this. And that might really be just a 3 to 5-year project or a 1-year to 2-year project. So, it could be little milestones, it could be different goals that you’re working uh simultaneously. So, this is kind of how you view this, but it is important to have those goals and have those dreams, right? Having that plan and having that dream will help that plan be more effectively realized, right? And then you reverse reverse into that with your assets and how to protect it, etc. So, I always like this. Every relationship requires a little TLC, right? Time, listening, and communication. So, we we can start working with you early, right? Going into that retirement as well as if you’re already there, and helping you ask good questions. But right, I think one of the biggest things on the wealth management side that we help our members do is that answer those questions that you didn’t know needed to be asked, right? Oh, I hadn’t considered that and thought about that. We can draw upon hundreds, if not thousands of different resources because of all of our collective clients that we’ve seen through this retirement phase. So you ask good questions, you sit back, you listen, communicate wisely and effectively. The TLC formula is a process. So how can we help?
I’ll just take a couple minutes here. And it might be something as life planning, right? Questions to help you imagine your life in retirement, we can kind of help you put that together. Your budgeting, where we determine some of that cash flow. Help you Have you forgotten this? Have you considered this? Obviously the account maintenance part, right? The Roth rollovers, the Roth conversions, how we look at taxation on that. Are there more effective tax strategies to pay less taxes during your retirement? And certainly less taxes if money gets passed on to children, grandchildren. Um establishing that effective income plan or that withdrawal plan, right? That is the biggest angst for people. People’s biggest fear in retirement is running out of money, and that is ranked ahead of death. Right? If you’re dead, you don’t have any problems. If you’re alive and you have no money, that is a problem. So hopefully that is none of you. I never wish that on anyone, but I can tell you proper planning can help you either minimize and avoid that all together. Obviously the portfolio management is what we do, right? That’s investment pro like the investment products and tax considerations.
So
I would say this, I think the biggest value add for us is strategy, right? Obviously portfolio management return is important, but in addition those tax implications before and during retirement, income structure strategies, protecting your downside, they help you sleep at night. So we’re at the Q&A part. So if you have any questions, please type those questions in the Q&A box or the chat box. I’ll give you a minute or two. While we’re waiting for that, I want to thank everyone for attending. I hope you found this information helpful. Um while you’re submitting these questions, I’m going to put up a one question survey. If you want an appointment to discuss your particular situation or review your particular situation, again, if you haven’t looked at Social Security structuring, timing, Roth conversions, your impact on that Irma and Medicare, right? What’s that reviewing that retirement income strategy, hedging losses in that portfolio going into retirement, schedule an appointment. So, let’s do some Q&A. Well, I guess I should put that appointment up. Uh That would probably be helpful. All right. Questions. What questions do we have?
If I am close to retirement, is it worth doing a Roth conversion or is it too late to make an impact on my financial plan? Um the short answer is no. A lot of the Roth conversions actually happen during your retirement. Usually it’s during your retirement but before your required minimum distributions happen. For most on this, well, I don’t know who’s on this call age-wise. Um but if you’re born 1960 or after, your RMD is is 75 years old. So, that that depends and that’s what we’d look at. But we do look at conversions, the timing of the conversions, and how much and what kind of tax savings you’re looking at and the impact on on on your social security as well. Uh a question two, I’m an IT professional. What do you recommend to those getting laid off at age 60? Put in for over 50 jobs and no interviews. I think people are discriminating because of my age. I would tell you that is a 100%fact of life that I know it’s illegal, but people absolutely discriminate on your age. So, this is what we could do. Right, first and foremost, uh if you haven’t you said no, I would say take my information down QR code. We can schedule some time to talk about it in specifics, but I’ll give you a general answer. Right, the first is looking at your assets and seeing where you’re positioned from 60 to retirement, right? And then looking at at that situation on on in between and then what networks do you have? Or what is your shortfall at retirement? So, to make to see where you are from a hard number wise or at least from that perspective, um
and then from there you kind of reverse engineer or say,”Okay, this is what I’m looking for. This is my shortfall.” Because that might be something where you’re like,”Look, I might be doing something outside of the IT world. It might be something that’s just part-time. It’s something to look while you’re while while your actual while your job hunt continues, you know, what kind of networks do you work?”But if you haven’t, schedule some time we can talk about it or give me a call um and then we can talk a little bit about that. Um
and I am sorry about that if you have I I hear that story unfortunately often. The best place to look for health insurance after retirement but before age 65? Um Well, usually it’s it’s usually the um Affordable Care Act, right? That ACA. Depending on where you live, uh it can help you with the pricing. It’s income-based. That is one of those ways you can look at. Generally speaking, if you’re trying to keep it and I guess depending on how old you are, how long that bridge is, right? Are you retiring at 64 and you have to do 65? Maybe something as simple as Cobra. Maybe you compare it to the Affordable Care Act because they still look at your income and your income-based.
So, next question.
When do you start adjusting your portfolio prior to retirement? 10 years? 5 years? Question. Uh so, adjusting your portfolio. So, so let me kind of give you the general Well, that’s going to be a broad brush stroke. But as a general rule, as you get closer to retirement, your portfolio becomes a little more conservative. And so on and so forth. But it doesn’t go all the way to I’m going to jokingly say this, recklessly conservative because as again we had talked about this, you could be retired for 20, 25, 30 years, right? So, inflation happens. You still need to plan for that. Um I would say that would be one of those things that depending on where you’re starting and what you do, that’s one of the things when we look at plans. We look at where you’re at. We give you a baseline for your risk modeling. And then from there, we take that down or if you’re already conservative to begin with, you might not be backing down at all. You might just stay all the way through.
Should you consider long-term care insurance? Um Maybe. Uh at least some long-term care plan, right? And that might not be one at all. So, depending on your assets, depending on where you live, depending on the resources that are available, this is something that we look at. The easiest thing to look at your particular situation is to schedule some time and we’ll kind of get a feel for your situation we can help you narrow down some of the options or even if you want to have that at all. Um we help we help a lot of members a lot on that situation where it’s like, “Hey, you know, is it that traditional long-term care insurance?” Maybe. There there’s a lot that are just hybrids that they’re actually tied to investments that you’re already doing out there. So, it kind of depends. There but it’s a very broad range. It’s not that usual,”Oh, I’m just going to buy long-term care insurance.” Same here. So, I don’t need to ask. I’m an unemployed IT guy, can’t find anything there. Looking at other stuff, but as a 63-year-old, no need to answer this. Thanks for all the good information on these webinars. And again, I am so sorry that you’re going through this. Definitely the IT side and the tech side, there are cutbacks. I those were one of the um from the sector-wise for the year, they were they were one of the last sectors. And and the reason for this, right? They went through COVID and companies companies laid people off because they were worried about things. And then, as we’re coming back from COVID, those people that they had laid off have moved on. And it may became filling those back filling those positions become become became very difficult. So, companies, as a result of that, were holding on to their labor. Right? Because they Because just in case, right? What happens if? But as we see we’re going through the cycle with AI, etc. Um some of companies coming under stress, right? With these build-outs, profitability. They’re having to make some of these these decisions. And you know, we look at this from a data perspective and and I understand these the data is then real people, right? Jobless, jobless claims, those are difficult. So, my heart goes out to anybody doing that. Uh Maybe one more question.
Is the market overvalued at the recent highs? Uh um Wow. Uh
So, the recent highs in the market or the index are kind of a tricky thing, right? Because the S&P 500 Well, you don’t know, it’s the largest 500 companies in the US, right? That’s Standard&Poor’s 500. But they’re they’re not equally weighted. So, the bigs have a much much much bigger impact on that index. They’re really kind of s- tech focused out. So, um So, with that said even though it’s at a high, it’s a lot of those companies that we’re starting to see a little bit of pullback. But because of those build-outs and investment, you’re seeing a lot more volatility. There’s been a lot of volatility certainly this year. And I would tell you just because something is at a new high from the index I that in itself I wouldn’t be worried about. Um there’s really a lot more fundamentals that are tied to that. So, I think that is it. I want to thank everybody for answering those questions. They were great questions. Thank you so much. Um for those who have gotten laid off, look, I mean schedule some time. Let’s take a look where you’re at and and see what you have to do to bridge the gap. I know it’s kind of difficult and I am sorry about that, but but maybe maybe there is some silver lining to these dark clouds that you’re all experiencing. But with that, I want to thank everybody for attending. I wish you all have a very, very happy and a healthy evening and take care and I hope to see you on future webinars. So with that, take care. Bye now.