Hey, welcome everybody. It uh we still have another couple more minutes before the top of the hour. So, we’ll uh wait until then so that uh other people that um uh want to join us that they can still join us. I hope everybody’s having a wonderful day. Uh I uh nice and sunny out where I’m at, but very very smoky. Uh I live in Utah. Um, a lion allows me to work out of my house. So, um, I live out here in the, uh, near the mountains. I love the mountains myself. So, but anyway, I hope everybody has some good plans for this, uh, upcoming weekend. We don’t have a holiday until next month, I believe. Is it uh,
Labor Day in September or Veterans Day? I always get those two days mixed up. Anyway, we’ve got those coming up here. But, uh, I hope everybody’s having a a wonderful summer. It is hot here. We are in the, uh, hundreds. Uh, I think it was like 103 recently here, but I don’t have the humidity that I used to have in the Midwest. I’m so grateful that I don’t have that humidity here. And the cool thing about in Utah is if it’s hot down in the valleys, then I can always run up into the mountains and cool down a little bit. So that’s uh that’s one of the benefits that I have uh that I love about being in the mountains here. I love the Rocky Mountains. Um so anyway, all right. With that being said, let’s go ahead and get started here. Uh before I open this up, let me just go over a couple of different things real quick. So, as I go along with this presentation, uh if there’s any questions that you might have that, uh pops up in your mind, please feel free to write those in the chat or the Q&A. Uh I will get to those at the very end of the webinar. Um, I would recommend everybody stay to those questions so that maybe somebody else has a question that uh might pertain to you that you might not have thought of and uh hopefully we can all uh learn from from this and uh share this with other people as well that um maybe not knew about this webinar. So, excuse me. With that being said, let me go ahead and get started here. Let me share my screen here.
screen one. Perfect. All right. So, the home stretch things that you need to do before uh retirement. So, let me talk a little bit about this. So, again, my name is Bernell Baker. I’m with Alliant Retirement and Investment Services, the division here at Aerys. And uh I’ve been with the company with the credit union here for about uh I think going on 14 years here uh here in a couple of months. I love working for the credit union. I hear constantly all the time on how much the um uh the credit union has helped out people and how they enjoy it. And I working for the credit union is even better. Like I said mentioned earlier, I work for my house so I’m able to do that and it’s just a it’s a great company to work for. I joke with my boss all the time that he stuck with me uh for the next uh 12 years whether he likes it or not. Uh and so far they like it. So, it’s uh it’s been a good fit uh and everything. So, with that being said, let’s go ahead and get started here. So, this presentation is really intended just for educational purposes uh and it’s proprietary here for the uh for the Allian Credit Union. So, we ask that you don’t record anything. Um unfortunately, this is not being recorded on our end either. I do get that question quite often if the slides are available um afterwards and they are not. Uh so let’s uh so with that we’ll go ahead and get into this. Here are the different websites that we have for the credit union here. You know we have these webinars that are complimentary to everybody here and even if you uh do sign up to this you can ask actually pass this on to other people that may not be a part of the credit union and we uh open these up to anybody and everybody as well. And we also so here at Alliant Alliant Retirement Investment Services, we can help out in so many different ways as far as your getting close towards retirement and things that you need to do in retirement. And we do different estate plannings to help our members out. We’re a full-fledged financial uh service uh uh division of the Atlantic Retirement Investment Services. We’re we’re proud to offer the interest rates that we we have for our savings and our certificates. Uh but there’s so many other things that we have that are available. Then some of those things you just can’t get on your own if you’re doing your own investments. And they’re really cool at that. So with that, let’s go ahead and get started here. So, if you’ve ever watched a race or participated in a race, you know, especially if it’s a long distance uh race, the last thing you want to do is get closer towards the end of the race and then uh stumble. You know, you want to build up uh momentum and speed going into the final stretch. Same thing as retirement. You’re getting close to retirement. Hopefully, uh many of you are. If you aren’t just yet, you will be at some point in time. And you don’t want to stumble and fall at the very end. So, you need to have a plan put together going into retirement so that you can enjoy retirement and um and be confident to know that you’ve worked hard your whole life and now that you have more time to be able to do things, hopefully you’ll have the money to be able to do those things as well. So, this is the seven different topics that we’re going to be talking about here. And let’s just go ahead and get into it. So determining when is the right time to retire. So the godfather of retirement was a gentleman by the name of Otto Bon uh Otto excuse me Bon Bismar sorry
and he came up with a concept of retirement. He was in Germany at the time and he put the age of 70 for retirement and that was back in 1890. Now the problem with that though was his life expectancy was about uh 43 44. So it’s easy to say okay everybody can retire when you’re at 70 when your life expectancy is almost half of that. You know here in 2026 here our retirement age depending on what uh when you were born and everything is anywhere from uh 60 uh now it’s either 65 to 67 is your full retirement age. But we have a much longer life expectancy than they did back in the 1890s. And there’s many people that uh in retirement, they are living in retirement 20 plus years. If you’re married, there’s a very good chance that either you or your spouse is going to be around for 20 25 years plus. So there was a survey that went out and said at what age do people think that they’re going to retire? Uh most people said anywhere from 60 to 65 and you can do that again with at 65 years old you can go on to Medicare and um and get your insurance. That’s one of the biggest costs that people uh take into consideration when they go to retire is where they’re going to get their insurance from. And you know if you retire prior to that then that’s absolutely wonderful. if you can, if you’re able to do that and have enough assets to be able to do that, you know, we do have the uh they they call it Obamacare, the ACA, uh the American ACA, Obamacare is what everybody calls it, um that you can be able to participate in and get some health insurance. Well, those people that thought that they could retire at 65, unfortunately, some people have been forced to retire early for one thing or another. Many people are retired early because of poor health. Um, and they, that’s my wife’s situation. My wife had to retire early because her health would not allow her to continue to work. My dad lost his job early on uh due to downsizing when he was working. was so specialized um that he couldn’t uh find another job in his field. So, he was um uh forced into retirement early as well. And then there’s many companies that offer early retirement buyouts. And some people jump on that because it’s a lot a lot more cost effective to hire somebody new than to pay somebody that’s been there for a long for a long time now. Nearly 70% of retirees retire early and and it’s out of their control. As I mentioned, my dad, my wife, those were things that were completely out of their control that they didn’t uh they could they couldn’t um make any changes or do anything like that. So nearly half of the people that do retire uh retire in the early 60s. So anywhere from 61 to 65, 44% of people retire that early due to one reason or another. You know, many people say that they’re going to reach their full retirement age of 65 to 67. Now, um if you’re born after 1960, your full retirement age is 67. Um but yet there’s not a lot of people that uh that retire at that age or even after. By far the majority of the people retire at 65 or early for whatever reason. Now, one thing that you need to take into consideration is ages of of um uh between spouses. You know, my wife and I are three years apart, but on average, there’s about a 2-year gap between uh spouses, between husband husbands and wives. And that two years is not that big of a deal when you’re young. you’re 25 to 23, you know, it’s not that big of a deal there. But when you go to retire, you know, if your full retirement age is at 60 65, your spouse could be 63. And then what do they do for for insurance? Okay, that’s something you need to take into consideration. And then not only that, at retirement, you got to take into consideration your life expectancy. you know, most uh women outlive men. And so if the husband is at 82 and the wife is at 80, if the husband passes away on that, the wife could be single in retirement for 9 years or more. That’s just it just what it is. Unfortunately, it’s just what it is. Now, obviously that’s statistics, you know, not every uh situation is like that. My wife, excuse me, my mother passed away um quite a bit um younger than my dad. And uh but she had a blood clot that broke loose. So, it wasn’t uh you know, any anything uh that she really knew about in advance, but uh yeah, she had a blood clot that broke loose. Oops, excuse me. And then my dad lived for another eight more years after that. Yeah, another eight more years. Now, here are some very important ages that you need to take into consideration when you go to retire or getting up there in age and everything. So, at at 50 years old, so anybody that has an income can contribute into a an IRA plan and or if they have a job, they can contribute into a 401k or 403b or whatever uh the company offers. Once you turn 50, you can start contributing more than when you were prior to age 50. So 49 or younger in an IRA plan currently this year here in 2026, the uh contribution if you’re 49 or younger, the maximum contrib contribution you can do in an IRA plan is uh $7,500. If you’re 50 or older, you can do $8,600. And the same thing goes towards 401k and we’ve got a slide coming up that will give all those numbers and everything. So at age 55 there are your some people you’ve got to qualify but some people are eligible for early distributions from current uh 401k plans and things. At 59 a half is when you can start taking money out of retirement accounts without acrewing an early 10% penalty paid towards taxes. So, at 59 and a half is the earliest you can do that without the penalty. At 60, some people can start to get social security. Uh, if you’re a widow or a widowerower, you can start doing that. Now, everybody can start taking out social security if you’re eligible for it. Everybody can start taking out at 62. But I, you know, unless you absolutely need it, I do not recommend that you start taking social security social security out at 62. um especially if you’re continuing to work. You know, if you continue to work and are under your full retirement age, uh you can only earn so much per year. I want to say it’s somewhere around $24,000. Um and then anything above that, there’s penalties uh that’s money is taken out of your social security if you do it early. Now, 65 is when you can, as I mentioned earlier, sign up for Medicare. And I recommend that everybody signs up for Medicare Part A when they turn 65. Doesn’t cost you anything at all and can eliminate some um some u uh uh uh issues down the road when you do go to sign up for part B or anything. Uh and again, it’s social security full retirement age if you’re born in 1960 or after. Full retirement age is at 67 years old. Now, at 70, if you aren’t taking social security out, absolutely start taking social security out at age 70, even if you’re still working. And you can take social security out at your full retirement age without any early withdrawal penalties or anything like that. But at 70, absolutely, because between your full retirement age and age 70, you get what’s called delayed credits. uh and you get about you get an 8% bump up in your social security for every year that you um don’t take out social security beyond your full retirement age. But there is no more delayed credits uh after the age of uh 70. So absolutely start taking out no matter what. Now for all your pre-tax 401k or your traditional IRAs, you have to start taking money out. currently at 73 years old. And if you’re not 73 by the year 2033, then it’ll jump up to 75 and it’s called your required minimum distribution or RMDs. You have to take it out of your traditional IRAs or your pre-tax 401ks. If you have any Roth IRAs or Roth 401ks, you do not have to do RMDs because the government isn’t going to uh uh get any taxes off of the withdrawals from a Roth account and all the money that went into the Roth accounts were already taxed. So all your pre-tax you have to start taking out at 73 and 75. Now, there’s one thing that many people are not aware of, unless you’re getting close towards the retirement age and you’ve done the research and everything. Uh, in retirement, if your RMDs are big enough, then there’s something called Irma, IRMA. If you make enough money in retirement or over a certain amount of money in retirement, including social security and any RMDs, you may have to pay extra for your Medicare Part B and your Medicare Part D premium. It’s not too bad starting out. It’s about 86 for Medicare Part B and I want to say 1450 or something like that for Medicare Part D. Uh but it jumps up quite a bit more than that. The next level up is at $22 a month for part A and I don’t remember what the part D is, but it it can be quite substantial. So, uh doing RMDs could uh penalize you down the road and paying extra on uh Medicare premiums and stuff. So, what we want to do is we want to take an aim at your retirement target. So here’s rule of number uh number one of of three is a good rule of thumb this is not required or anything but a good rule of thumb is to save enough to generate anywhere from se 70 to 90% of your pre-tax uh income. If you can do that then you can rest assure that retirement should be very comfortable for you. Now there are some costs that are going that may go down in retirement. Hopefully, you’ve paid off your house by the time that you retire. A transportation may go down because you’re not commuting as much anymore. I work from house or from my house. So, I’m guessing my transportation probably will go up because I’ll have to go visit the grandkids and all that kind of things. Clothing. I don’t have to buy these Alliance shirts anymore uh or get them dry cleananed or anything like that in retirement. And you know, if you go out to eat, you know, if you work downtown or work at a different place, often times you’ll go out to eat uh in retirement, you’ll be able to have the time to be able to cook at the house, and obviously that’s going to save a lot more money uh than eating out. Now, there’s some cost that may go up. healthare. If you have a a group health plan, it may go up now that you’re having to pay uh the Medicare premiums uh by yourself. As I mentioned earlier in retirement, hopefully you’ve got the time to uh to do different things. You might be able to travel. I’ve got a good buddy of mine from Australia and he says that, you know, going back to visit family or friends, he either has all the time in the world but no money. That’s when he’s been unemployed. or he’s got all the money to be able to do it, but he’s got no more time because that’s when he’s been working. So hopefully in retirement, you will have both money and time to be able to travel and to do the things that you want to do. Utilities may go up. You’re at home now, you got lights on, TVs going on, uh things like that. Uh so utilities could go up. And then home maintenance. I’m sure my grandkids will come over to the house uh more often in retirement. And um I actually caught my two grandsons uh earlier this uh this summer. Uh they thought it was really cool to throw dirt in the air conditioning unit as the fan was on. So the the more grandkids I have over the house, and I’ve got a total of five right now, but the more often they’re going to come over to the house, I guarantee you I will have more uh home maintenance uh uh things that I will have to pay for. But it’s worth it. They are uh they are great uh things. great great additions to a family and everything. Now, there’s some cost that’s going to go away. Social Security, uh, payroll tax, if you don’t have the income coming in, you’re not working anymore, obviously, that’s going to go away. And then retirement contributions as well will go away because you have to have an income in order to contribute into a uh into a an IRA account or a 401k or a 403b, anything like that. So income needs could be different in retirement as well. The your income needs should go down also uh for the most part. And you know if you can budget to say anywhere from 70 to 90% of your pre-retirement income again you should probably feel very comfortable to be able to live and enjoy life in retirement. So the second rule of thumb is is to save a multiple of your salary based upon your age. So, let’s take a look at that. Let’s say that you are uh 60, excuse me, 55 years old and your salary is $100,000. A good rule of thumb, again, not required, but a good rule of thumb is to have anywhere from 60 to to 8, excuse me, 600 to $800,000 saved in uh in retirement plans. And if you can do that, then wonderful. uh then you then again you should be able to go into retirement uh with a peace of mind knowing that unless some catastrophe happened you should be able to have enough money in retirement. And then the last rule of thumb is to save enough to generate about a 4% withdrawal rate. You know that’s kind of the industry standard. Although recently there’s been some controversy about that. But if you can do a 4% withdrawal withdrawal rate, then you ought to be uh pretty uh pretty well set and comfortable uh for retirement. So what does that 4% take uh look at? So let’s say that you want to withdraw at 4% over 20 years in retirement. Okay, if you’re desired income coming in from your assets are at $25,000 and let’s say you get an average of 1.5% return. Now, obviously, our Alliant, again, shameless plugin here for Allian Credit Union, our savings account is returning double that at 3.01, unless they changed it here in September. I haven’t looked at it, uh, but I don’t think so. Then, if you’re going to do that, then uh and and be able to withdraw $25,000 a year from your uh assets, then you need half a million to be able to do that. If you want to have $50,000 extra a year, getting a 4% withdrawal draw withdrawal rate over 20 years, you need and getting a a one and a half% return. You need a million dollars in there. If you want a h 100,000, you need $2.1 million to be able to do that. Almost 2.2. Now, let’s say you’re getting a little bit higher of a return, a 5% return. And a 5% return is really not that difficult to do. And it doesn’t have to be aggressive at all whatsoever. That is a very conservative uh type of a return. But if you’re getting a 5% return, you can see that the amount that you need gets drastically reduced down to 391 for $25,000. If you want $50,000 extra in retirement, then you need to have about $782,000. And if you want to have $100,000 in retirement extra, then it’s at $1.5 million is what you would need. Now, in order to save that uh to get those returns and everything, let’s say that you’re getting a 3% return. Okay. Now for again for $25,000 a 3% return at $476 a half uh $50,000 952 and uh $100,000 of $1.9 million. Now again if you’re getting a 6% return versus a 3% you can see once again that your uh assets just need to be they can be a little bit less. And again, getting a 6% return or a 5% return, it doesn’t have to be all that uh risky at all whatsoever. You can be fairly conservative and still get a decent return uh inside of it. So, what you want to do and the third thing here is to maximize your nest egg to to uh contribute as much as you possibly can. So, let’s take a a hypothetical look at a couple here. And let’s say that the wife is at 50 years old and she’s a retired school teacher. So she’s not working anymore. But so to keep busy and active, she volunteers her time. And let’s say that the husband is an engineer and they want to maximize their returns at age 50 and uh and beyond. So I mentioned earlier that there are maximum contributions into 401k, 403bs, 457. They’re all the same thing. age. It depends on the type of company you work for. So the maximum contribution here in 2026 is 24,500. If you have a simple 401k or a simple IRA at 17,000 and a SEP, the maximum contribution you could do is at 72. But since he is working and not for himself, he contributes to his uh maximum uh employer plan, his 401k. And let’s say that the company matches uh 3%. So he’s able to do those each and every year. And then you since they are both 50, they can do uh do what is called the catchup contributions. So he is over 50 and so is she. So he can do an extra 12,000 well $8,000 into their 401k plan that he has here. Now you can also add into your own IRA account depending on income and things like that. So, in a Roth IRA, there are limits on how, excuse me, income limits uh uh to be able to contribute to a Roth IRA directly into it. There’s always the backdoor Roth or the Roth conversion. They’re basically the same thing. Um but, uh let’s say that he decides to contribute into his in into his uh his IRA accounts. And since his income is $150,000 and his wife is retired, they would be able to contribute the maximum amount into either traditional or Roth IRA. Roth is a great way to go because then it’s uh the taxes are paid now and then in retirement you don’t have to take any um any it doesn’t go towards any tax consequences or anything like that. So now let’s say that his wife, you know, because the husband is working, the wife can contribute into a a IRA account as well. And since she is 50, she can also contribute the maximum amount uh into the IRA account. So again, a spousal IRA is at 7,500 and since she is 50 or older, she can do an additional $1,100 for a total of 86. Now, if you add all these up together, each year they can do a a maximum contribution here of $54,200. Now, if we just say, okay, we’re going to do $51,000 and they’ve got about 15 years towards retirement. Again, they’re 50 years old, so at 65, they want to retire. And let’s say they’re fairly conservative and they just get an average 6% return. You know, they don’t want to be too aggressive. um because they don’t have as much time to make up in case uh the market takes a uh takes a dump or anything. But if you’ve got $51,000 and you contribute that each year into a into your retirement assets for the next 15 years, averaging a 6% return, in 15 years, you’ll have $1.2 million saved up just during that time. Now, that’s up until 65 years old. And at 65, you still need to be invested or at least get some in. So, that’s just up to uh 65. And then from that on time on forward, it can still continue to grow for you, which is really nice. Now, let’s get a portfolio checkup. This is something that you want to do. The average worker switches jobs every has 12 jobs throughout their life. If you’re my son, he’s probably he’s at 30 31. He’s almost had 12 jobs just already. Uh but he’s been doing really good where he’s where he’s currently at and everything. And most companies when you start a job, most companies now have automatic enrollments. Well, they just automatically sign you up and and and contribute into a into their company 401k or anything. And then 63% of American workers have access to define contribution retirement plans, which is kind of nice, which is good. Now, one thing that you want to take a look at is you may be currently, let’s say you’re getting closer towards retirement, like myself, you know, and I want to be a little bit more conservative than I was when I was younger. And let’s say that I want to have an average kind of a balanced investment strategy of 60% stocks, 40% bonds. If I take my previous jobs when I was younger and add those up, obviously when I was younger, I would have wanted to be a lot more aggressive. If you combine those and if you haven’t moved those into your current plan or into an IRA where you only have a couple of different plans out there, if you combined all of the different IRA accounts with your 401k account, you may be more aggressive than what you actually want to be. So, I always recommend that when you leave a company, take your 401k out, again, 403b, whatever it is, take your retirement plan out, and move it over into an IRA. You have a lot more options to pick and choose from in an IRA that you just can’t do in a 401k. And then that way, you’re really only dealing with kind of two different accounts. Either your IRAs and maybe your comp your current company’s 401k account. you can just manage it a lot better uh than if you’ve got three or four or five different old 401ks out there. So, let’s take a look and see, you know, what has happened in the past. So, let’s say let’s say that you have too much invested in the stock market and this is 1999 and you want to retire in three more years and you’ve got a $900,000 in your IRA. So then you’re going to need to get about an 8% return over the next three years to to have uh one $1.1 million in your retirement account. I don’t know if many of you remember what happened in 1999, but we had the tech bubble burst and the stock market went down for three years in a row. Um and so your $900,000 could have been down to $584,000 in those three years. So half of what you wanted to have in order to retire um after 3 years. Now if you were a little bit more diversified and you were at 50/50, 50% stocks, 50% bonds, you wouldn’t have lost hardly anything. Okay? Your $900,000 would have gone down to $871,000.
But then 12 months after that, you would, if you were in the 5050 plan, you would have been up into over a million dollars. But it took almost four years for your 100% stocks to build back up again. I’ll be honest with you, that’s kind of what happened with my uh father-in-law. Uh my wife is from Ireland and uh and my my in-laws came to the States. Um basically well they were in Ireland then they moved to South Africa and then they came to the states after the aparite happened in South Africa or while that was happening I should say he couldn’t get any of his retirement money out of South Africa to come here so he came to the states um back in about the mid90s and um and had to had to start all over and so he knew he had to be aggressive. his goal was to retire at uh at at 2008. Well, we unfortunately we all know what happened in 2008, the great recession. Uh he didn’t retire until 2012, four years longer than what he wanted to retire, but he was able to retire. I give him all the credit in the world world and he’s had a very comfortable life. But these things are reality. They can happen. Now, let’s also take a look at what happens if you panic and get out of the market. So, again, let’s say you want to have you got $900,000 in retirement and uh you want to retire in three more years and we have a 2008 happen. My father-in-law’s scenario here. If you were 50/50% stocks and bonds, your $900,000 fell down to about $700,000. Not drastic as if it was uh in 2000 the tech bubble burst if you’re 100% stocks. But if you panicked at that particular time and said, “Oh no, I cannot watch it go down. I want to go ultraconervative and put everything in T bills.” then in in 2010 when you wanted to uh maybe retire, it would have gained a little bit over 2008 to 2010. But if you didn’t panic knowing that when the market goes down, it has always rebound and came back up again. If you didn’t move any of your investments out of a 50/50 uh uh stocks to bond mixture, you would have been back up to a h 100,000 or excuse me on up to a million dollars by the end of 2010. Your T bills would have you taken you forever to get back up to that million dollar uh mark. So again, get a good investment plan going knowing that it’s going to go up and it’s going to go down, but whenever it’s gone down, it has always rebounded and come back up again. Can’t guarantee that’s going to happen always in the future, but that’s what has always happened in the past. Now, I always recommend that you update your beneficiaries or take a look at those on a regular basis. As I mentioned earlier, my mom passed away in 2016. Uh my dad got remarried to a wonderful lady in 2017. And so there’s there’s there could be some different changes there. Maybe a different spouse. In my case, I got grandkids that uh that that could come up. I think I’m done at five. Not my decision, though, but I think uh my kids are done at uh at five grandkids. You know, I’ve had I had a granddaughter born in December and a grandson born in February, so they’re both less than a year old. I always recommend that you do a trust over a will. With a will, uh, your your assets are still going to go through probate. And during probate, anybody can can contest that. And a tr and probate is a public record. A trust is not and it does not go through probate. So, I recommend uh that you do a trust over a will. And there’s different online accounts that you can do a trust or go through a local attorney. Um, but I I definitely recommend you do a trust over a will. So, let’s take a look at creating a social security strategy. Now, when I talk about social security, I constantly hear, “Oh, no, social security is going to go bankrupt. We’re not going to do anything.” That is not the case. What is going on with Social Security is that up until 2021, there was more money going into the Social Security trust fund than what was coming out. In 2021, when the baby boomer started to retire, that switched away around. Now, there is more money coming out of Social Security than what’s going into it. Again, social security will never ever go away because it is a, you know, as those of us that are still working now, we’re contributing into the social security trust fund. What will go away unless government does anything is that excess that’s currently in the trust fund. Now, so it’s supposed to run out. The the excess is supposed to run out in 2033. You know, if you if you trust the government, their math never adds up. So, who knows when it will actually go out. And if the government doesn’t make any changes in that, then benefits could drop. I truly do not see a time where either party would allow the benefits to be decreased. I think that there would be a lot more riding in the street than we’ve seen in recent years if social security was ever cut down by 22% or whatever. One of the things that they could do and unfortunately government is just kicking the can down the road. Nobody wants to deal with it right now. Uh we’ve got the midterm elections coming up. I’ll be shocked and surprised if anybody runs on fixing social security. They’re all just pushing it down the street. But what they can do is they could increase the taxes that uh are are being taxed for social security. Right now it’s about half payroll taxes are about 1.8% that is going in towards social security. They could increase that to 3.65. Another thing that they could do is I want to say, don’t quote me on the amount here, but Social Security is only taxed up to like $400,000 of income. You know, we hear the tax the rich and everything. They could increase that and say it’s unlimited and it’s not going to affect by far the majority of us. I know it’s not going to affect me at all if they increase it in or uh they tax social security above that $400,000 threat income threshold or whatever. So, just a couple of things that they can do, but I I just absolutely do not see social security uh actually ever going away. Uh it could be reduced down, but it it it won’t ever go away. So, as I’ve mentioned a couple of times about a full retirement age. So, here’s the different ages and and what your full retirement age is. You know, again, if you’re born after 1960, your full retirement age is 67. Prior to 1956, you’re already retired or at least at full retirement age, I should say now. And then 57, 58, 59 is 66 and and different months uh and everything. So now if somebody were to maximize the amounts that they paid into social security, here’s what the maximum amount would be per age monthly income. So if your full retirement age is at 67 like myself, then the maximum you’re going to get in social security is four uh $4,200 a month. The average though is a lot less, the $2,600 a month. Okay? So, if you did an average income earnings throughout your lifetime, then you’re going to get about $2,600 a month. Now, depending on what your income is, that $2,600 uh or the more income that you have uh have had coming in then and if you want certain uh to to maintain that lifestyle, the more of a lifestyle you want to maintain, the less of a percentage social security is going to be to earning that. So, if you want a lifestyle of say of a hundred $50,000 a year, your social security is going to cover about half of that. If you want $100,000, it’s only going to cover about 40% of that. So, you got to come up with the other 60% on your own. And you can see at the 150 or 200 uh,000 mark, you’re going to have to come up with more uh on your own to maintain that kind of a lifestyle income. So build a retirement income stream. So let’s take a look at different income uh on what you can get here. So in a money market account, the average return of a money market account is 22%. Again, a shameless plug out there for the lion savings account. A one-year CD from a normal bank is about a half percent uh for the year. Now again, not being aggressive at all whatsoever, but if you invest in different bonds, you could and and bonds bonds can go down. Do not get me wrong. Bonds do can go down, but they don’t go down as much as the stock market. There’s a lot less volatility, a lot less uh fluctuation in that. You can see that if you invest just a little bit more into something, again, not being aggressive or anything, but if you have a a half a million dollars earning at a little bit better of an interest rate, again, not being aggressive, you can see that your that your income or the interest that you earn for the year can grow quite substantially. Now, let’s say that you want to have systematic withdrawals and that you’ve got an a stock out there that’s got a share price of uh uh $5 per share. And let’s say you want to withdraw $1,500 a month. Well, as we know, stock prices go up and go down. So, they will fluctuate. If you want to maintain that consistent $1,500 a month, you’re going to sell less shares if that stock price is increase increases. Let’s say it increases up to 6%, then you only have to sell 250 shares to get that $1,500 a month. But if the stock price goes down to four bucks, you have to sell more shares, $375 to maintain that same $1,500 a month. And then you can see that your share price uh your share balance will decrease based upon the number of shares that you have to take out to maintain that $1,500 a month. Now let’s take some turning retirement savings into retirement income. Okay. So if you do an income producing products, you know, then you don’t have uh any distributions coming out of your original savings. the original dollar amount can stay there,
but your income could fluctuate. So you if you have a dividend paying stock or dividend paying mutual fund or an ETF or whatever, those things are not consistently paying out the same amount of dividends. Uh even a savings account, savings accounts fluctuate depending what interest rates the Fed sets at. So, uh your income may fluctuate if you if you depend on that. Uh some months could be higher, some months could be lower just depending on what the uh payout is. But if you have a systematic withdrawal plan, then your income is is consistent. You know what you’re going to be taking out and so you’ll be able to get that and make a budget on a monthly basis, but it may dip into some of your original savings. depending on their returns and how much you take uh take out. So, but let’s look beyond the money. So, the good thing is is there’s a there was a study that put out there and they have this happiness this human happiness curve and most people are less happy 45 to 50 years old. But the good thing about that is the happiness curve starts to increase after that. So you’ve got some good years ahead of you where happiness is uh can be uh a lot better for you. Okay? And this is what the the average happiness curve is. So look forward uh to retirement and and I realize that happiness depends on a lot of different things. a lot of health. Health health can really uh poor health can really uh uh had some people look very uh uh depressed going into the future. As I as I mentioned earlier, my wife uh had to retire early because of health. She doesn’t have the best uh best of health. Uh but we’re we’re doing the very best that we can and everything. Friendships are a key. Um I’ve got many friends that I love to go and do different things with. Um, and so, you know, have friends in retirement and that can help lift up your your spirits and everything as long as they’ve got the they’re good friends and everything. And then family, you know, again, I love hanging out with my kids. I’ve got uh three ch three kids of myself. Uh, they’re all married. I’ve got five grandkids and I love it when uh when we’re all together and I get to pick on my grandkids and then send them home. I can give them all kinds of candy and everything like that. and then send them home and let their parents deal with it. It’s wonderful. If you’re not a grandparent, it is great. Now, the uh island of Okinawa has something called icky guy. This is basically it translate into something to live for. So, you’ve got to determine what your icky guy is. You got to figure out what you love to do and what the world needs and and supply that need to the world. You got to figure out in retirement if you can do something that you get paid for, something that you enjoy to do and figure out what you’re good at. If you can find the answers to those four different thing, four different things there, then you can find out what your icky guy is. Okay? You can create a retirement living plan in retirement. And you know, in retirement, you can contribute to a a worthy cause. Uh I’ve got an uncle that volunteers his time once a week uh building little car, little uh wooden cars, uh at a local place here, and they donate those cars to to needy kids. You can visit family and friends. Uh like I said, my buddy uh can go back to Australia and visit his family and friends there. Uh I’ve got uh my children here close uh all within uh about 40 minutes of me, but I’ve got brothers that live all over the country. You can pursue different hobbies and there’s no age limit on any of those things. You can start to travel and do the things that you want to do. If you want to start a business when in when you’re retired, go for it or possibly even go back to school. So here are some people that in retirement where they should have been retired went on went on and did some amazing things. Peter Roier, he invented the thesaurus when he was 73 years old. Colonel Sanders started the first KFC at 65. Uh Madonna Bter, she was the uh uh the uh uh triathlon nun. Um, and she she did uh triathlons up until 82 years old. I can’t even do a triathlon right now. I think that is absolutely fantastic. And Grandma Moses started painting and Yikiro Morai, he started to climb Mount Everest. And his last and and at uh 80 or at 76 um no at 70 he was the oldest person to reach Mount Everest and then he crushed that at 80 years old. That to me is just amazing that uh all these people in retirement they didn’t think that life ended but they went out and they did uh what they wanted to do. They did their passion and was able to benefit uh all of us because of that. So unknown author author said this retirement is wonderful if you have two essentials much to live on and much to live for. And again, going back to my buddy that says from Australia in retirement, he want he he’ll have the time to do what he wants to do. Hopefully, he’ll have the money. Same thing with you. You’ll have the time to be able to do the things that you want to do. Hopefully, you’ll have the money to be able to do that. So, just to kind of recap here, there’s seven different things that you need to do in retirement. You know, determine when is the right time for you. And that’s going to be very personal. Most of these things are are very personal. You got to decide when the right time for retirement is for you. Take aim at your retirement targets. Make sure that you keep your eye on the prize and keep working towards that. Maximize your maximize your nest egg. Put as much into retirement as you possibly can. If you can max it out, wonderful. If you can’t put in the most that you possibly can. Now, you got to pay your bills now. And I completely understand that. and get a portfolio checkup. You know, most people have multiple 401ks out there and if you combine it together, it’s really surprising how aggressive they are uh more aggressive than that than what they really want to be uh at that time in their lives. And create a social security strategy. You know, is full retirement age the right thing for you? Is taking it out early, taking up to 70. Again, that’s going to there’s going to be a lot of factors that goes into play on that. build a retirement income stream. Social Security is not going to be enough. Excuse me. And so, you want to have some income coming in to be able to do the things you enjoy to do. And look beyond the money. The money isn’t everything. When you pass away, the money is going to stay here, but uh hopefully your memories will be able to uh go on with you uh in the afterlife if you believe in that. I would always recommend that you work with a financial professional and that’s what we do here at Alliant Retirement Investment Services. We work with you and kind of figure out a game plan for you. Uh a financial professional has additional things that you can invest in that you just can’t do on your own uh that many people don’t uh aren’t even aware of that are available out there. You know, one of the things that we have here at Alliant Retirement Investment Services is we just have a a wealth vision plan that we can kind of put together to make sure that you’ve got enough money in retirement. Even if you’re early on, you know, you’re maybe not even close to retirement. Say, let’s say you’re 40 years old and you just want to make sure that you are on the right track, we can do this uh for you as well. So here’s an example of a report that we can run uh that can help you understand do you have enough money uh for retirement you know and this is uh you know it just comes up with overall income you know for example Bob and Mary here the dark blue uh that is their social security that they’ve got coming in the light blue there that’s a little pension plan that one of them has the red line there that’s their income and then the orange is their RMDs So, you know, based upon your assets that you have now, excuse me, uh I’ve got uh asthma and it just flares up when I talk too much and unfortunately I uh do a really good job of that. Um but uh in retirement, you’ve got your RMDs and you know, you can see that do you have enough income coming in with your RMD, social security, pensions or rental property or whatever. Do you have enough money to uh meet your expenses? And then we take a look at and see over your lifetime what’s the total taxes that you will pay and then also what will be your portfolio left to pass on to beneficiaries. Now one of the things that we really do with this is do uh Roth conversions. There’s so much talk about there about Roths. Is it the right thing for you? I never know the answer for that unless we do this plan here. So, in this scenario here, we’re taking a look at and say, “Okay, well, we just want to do a Roth conversion of say $60,000 a year. That’s it.” Uh, and it’ll last us for eight years in a row. What will that whal
uh portfolio in this particular situation? It would decrease their taxes by $140,000 over their lifetime. So, that that’s money saved for them. and it would increase their portfolio by $828,000 when they pass on uh this is the money that they would pass on to beneficiaries or this is money that they would have on later on in their life should they need to go into a nursing home or a long-term facility. And there’s other different things that we can take a look at as well. You know, again, Dave and Sarah here, and they’ve got some income coming in. And again the the dark blue is the social security. Uh the light blue is a pension and then RMDs. And then the yellow here is if they did not have enough income coming in to meet their expenses. So they would have to take money out of their current assets. So that’s also something that’s thrown in with this plan here as well. And then based upon their information here, their assets would continue to grow throughout the rest of their life. And if we did a Roth plan, this is typically what I do with these plans is fill it up to a a set tax bracket uh to see does the tax, you know, filling it up to a tax bracket and which tax bracket is the best uh does this um benefit you, hurt you or whatever. In this particular situation, if they filled it up to the tax bracket uh for five years, it would save them $16,000
overall in their lifetime in retirement, but then it would also add a quarter of a million dollar in their portfolio when they pass away. Now, one thing to take into consideration here on the far right here, the fourth column in the far right there, we’ve got one of them passing away. So, if you’re married and your spouse passes away in retirement and if you’re doing RMDs, you know, again, based upon your age and everything, your RMDs are going to be about the same still that you have to take out. But the problem is is at that point in time, you are now going to start filing as a single person. It’s what we like to refer to as the widow or widowers tax. RMDs are very similar. Now, granted, your income is going to drop by the lesser of the two. social security uh uh checks that you’re getting in. But you can see here that just by losing a spouse, your taxes could potentially go up into a higher tax bracket. Something to take into consideration. And then a Roth IRA account will will help you eliminate some of that. And then also that Irma that I was talking about earlier. So again, it could uh increase decrease taxes. Again, I never know what to do until that. Now, again, Aerys, uh that is all of the webinar here. I’ll get to the questions here in a little bit. But at Aerys here, again, we’re a full-fledged financial consulting firm. But why Aerys? Why choose us over somebody else out there? First of all, what we want to do is we want to get to know you and design a plan specifically for your individual situation. And then we use a team approach to come up with that plan to make sure that we’re covering all bases. And we want to build a lasting lifetime relationship for the rest of your life. You know, at Aerys, there is one person that you would talk to. If you if you do choose to come with me, then you would always call me for everything. Here’s my contact information. Uh my direct phone number here at Alliant uh is 7734628612.
That rings directly on my desk or my email address right there [email protected].
And um I would be glad to be able to uh make an appointment if you’d like that uh uh uh that wealth vision plan that I just uh spoke about. It’s complimentary. I don’t think I mentioned that earlier. Doesn’t cost you anything to do. Um, many other firms will charge whether you do anything with them or not. We don’t charge anything. Uh, even if you don’t do with us. So, I highly recommend that everybody does it because the problem is is if you’re going into into retirement without a plan, then all you have is a retirement wish. And nobody wants to go into retirement with a wish. So with that being said, let me get into some of these questions here. Uh right. So are you saying 60 to or excuse me 600 to 800,000 in total savings in uh is pension 401k social security. So the 600 to 800,000 that’s referring back to the slide. If you are uh 55 years old and your income is $100,000, then you want to you’d like to have again it’s not a requirement obviously, but to to feel comfortable would be 600 to 800,000 between all of your liquid assets, savings accounts, CDs, 401ks, IRA, uh brokerage accounts, anything like that. Those are all liquid assets. A home is not considered a liquid asset because it usually takes you at least a month to sell it, transfer everything. So, liquid assets or savings, uh, retirement plans, anything like that. Uh, another question here, uh, social security tax stops coming out of your paycheck for the year once your gross earnings reach 184. Oh, is it only 184? I thought it was a lot higher than that. Uh, okay. Uh the social security payroll tax is a federal tax used to fund retirement disability uh and survivor benefits for American workers. Absolutely. The total tax rate is 12.4 split evenly. Yes. Between uh you and your uh employer. If you are self-employed, you’re paying that full 12.4%. Uh as well um it applies to earnings up to a yearly maximum limit of 184. Oh, I thought it was a lot. I’m not a CPA. Obviously, I’m not a CPA. Um I don’t do taxes, but I thought it was a lot higher um than 184
on that. I uh
that’s social security. Okay. Okay. All right. Uh Robert, thank you for that information. Uh that is wonderful. Uh and that is all the questions that I had with this. Oh, let me let me send this out here. If you would like to have a uh that uh wealth vision plan ran for you or if you’d like to continue this conversation with me, uh please feel free to answer yes to this question here and then I will be glad to be able to reach out to you and um answer any questions that you might have. Again, that plan is complimentary, doesn’t cost you anything to do, and it’s just something that uh is uh I think is very beneficial. It can give you that peace of mind knowing that um that whether you’re set uh for retirement or if there’s maybe something that you need to change and add to uh contributions for retirement, uh then as well. Also the big thing about that that I think is really most beneficial is a Roth conversion. We really look at that and uh make sure that the Roth to see if a Roth conversion is the right thing for you. So with that being said, we’re right at the 1 hour mark. Again, everybody, thank you so much. For those that you answered yes to the questionnaire here, I will reach out to you. I will give you a call first and uh if I don’t get you, if I uh have to leave you a voicemail, I’ll I will leave you a voicemail and then I will follow it up with an email. And with my email uh you will have access to my calendar. You could schedule a Zoom meeting and then we can uh that way we’re not playing phone tag back and forth trying to get a hold of each other. Uh, with that being said, I hope everybody has a wonderful day, uh, wonderful rest of your week, and, uh, take care. Bye.