Transcript

Mike:

This week, it’s gonna be story time. We’re gonna title this story. The three big, bad bears, remember Goldilocks and the three bears. And you had mama bear and Papa bear and baby bear. No, not those bears. These are big, bad ugly mean bears. So the three big bears couple came to our office. They, they had listened to our radio show, I think. And they said, oh, we wanna get a second opinion on, on our financial planning cuz this couple they’re getting ready to retire. So as I’m talking to ’em, I said, well, tell me a little bit about, about your situation. And then I asked a question, I said, so what could get in the way of your success? So why not keep doing what you’re doing now? What could go wrong and really disrupt your retirement from your perspective? And they said, they say, you know, Mike, we have three kind of three things that we’re a little worried about.

Mike:

I call ’em the three bears, right? Number one, money lasting. So number one question is, will our money last? Now these people had a financial advisor. And so I, I just asked them, I said, well, what does your advisor say? You know what their advisor said, I hear this all the time said, they said, well, he says that we’re fine. We shouldn’t have to worry about it. But he never tells us like how we’re fine, how this is is all gonna work out. He just says, ah, you got plenty of money. Don’t worry about it. They didn’t have a plan for their income. And that created some fear. That’s bear number one. And by the way, the reason I’m sharing this with you is guess what? A lot of people have these same concerns. A lot of people had these same bears, you know, sitting out there in their minds said, okay, you said three.

Mike:

That was one. What, what are we worried about? Oh Mike, the big HC. That’s funny. That’s what they called it. They called it the big HC. I said, HC. I said, I’m guessing that’s healthcare. They said, you got it. We have no clue how we’re gonna handle. You know, what if, what if we get sick? Right? What if we have to spend a bunch of money on health, healthcare, they didn’t know how Medicare worked or how insurance worked and they, or they both had parents. His mom, her dad ended up in nursing homes and they spent a boatload of money in nursing homes. They’re like, what if that happens to us? We run outta money. And then our surviving spouse has nothing. What does your advisor say about that? Guess what? Same thing. Yeah. Apply money. Don’t worry. That’s not real helpful. They needed a plan.

Mike:

And so that’s bear number two. What about bear? Number three, bear. Number three. I said, okay. So you’re worried that your money you, you’re not sure your money’s gonna last and that’s a concern worried about healthcare expenses. Guess what? That’s normal. Right? So what’s number three for you taxes. What happens if tax rates go up, Mike? They said, they said, Hey Mike, almost all of our money are in 401ks. Iras. We’ve never paid tax on that money. What’s gonna happen when we start pulling it out and we gotta pay all these taxes and what’s gonna happen when they have to raise taxes. How’s that going to affect our financial security? Well, what’s your advisor say about that? Oh, he doesn’t mess with taxes. Big, bad bear. Number one. Not sure money’s gonna last. That’s a big concern. Big, bad bear. Number two. Ah, healthcare. What happens if I, you know, need healthcare down the road and big, bad bear.

Mike:

Number three is taxes. What if tax rates go up? Am I gonna be okay? These are very common questions. So here’s reality as your why. If you’re retired, if you’re nearing retirement, I’ll bet that you have one, maybe two, maybe all three of these things you worry about. Maybe you have the same bears bothering you. How do we help these people? Right? Because it turned out their advisor that they’ve been working with for the last, I think it was 12, 13 years. Great guy. The challenge was that their advisor, not a retirement specialist. He didn’t really deal with retirement planning. What this couple had to kind of learn for themselves is that they were getting to a stage of life. In fact, they were really at a stage of life where it was time to update their advisor. It’s like, okay, we had an advisor that’s focused on growth and accumulation.

Mike:

And he did a great job. But now we’re at a stage of life where we need an advisor who can help us not get to retirement, but instead get through retirement. So how did we help this couple? Well, here’s what you, you need. This is what you should have. If you’re getting close to retirement, you’re already in retirement. These are things you need to address. These three big, bad bears. And so we’ll call them pots of honey, because maybe the bear is the reason the bear is irritable is because they’re hungry and they’re hungry. Right? My wife tells me I get hungry. So we’ll assume that this big, these big, bad bears are hangry. Number one pot of honey to make ’em happy, a rip, a written retirement income plan. You need to have that. It tells you when you’re going to take your social security income, it tells you when you’re, when, where and how much and how long, what does that mean?

Mike:

When are you gonna start taking money from your different accounts? When are you gonna take from your IRA? When you gonna take from your Roth IRA, when are you gonna take from after tax accounts? Where, well, IRA Roth, IRA. After tax, those two kind of connect, they go together. How much are you gonna take from those accounts when you do make those distributions and how long will you be taking those distributions? In other words, you should have a plan. That’s not complicated. This does not have, in fact, don’t make it complicated. I had this guy come in the office, oh my gosh, he is, I love this. We call him spreadsheet guy, right? Spreadsheet guy comes in the office, he’s got this monster spreadsheet that he’s built to track his income for his lifetime and his wife’s lifetime. And he’s very proud of it. We’re he loves his spreadsheet.

Mike:

And he’s a great guy. But what I did was I said, Hey, spreadsheet, guy let’s do this. I’m gonna take this spreadsheet away from you. And I’m gonna put it in front of your wife. And now it’s your wife’s job to explain to me how this is gonna work. We’re gonna assume you get in a car accident and die. How does this plan take care of your wife, Mary, what’s going on on that page? And you know what? They all this, it happens all the time. She just looks at me and it’s like, I have no idea. He’s tried to tell me about a hundred times. I just don’t get it. And it’s not that she’s dumb because she’s not. It’s just that spreadsheet guy. You know, he thinks one way, right? And you know how we marry our opposites. She thinks a different way.

Mike:

And so they’re not connecting there. You need to have a written retirement income plan that is nice and clean and simple so that if you’re spreadsheet guy, you can look and say, yeah, I got it. Super simple. But more importantly, if you’re married to a gal, that’s not a spreadsheet person. Then she can look at it and say, oh, that’s okay. I understand that. I don’t understand this big old spreadsheet, but I understand that for healthcare. Hey, guess what we need? We need a healthcare plan. We, and this health healthcare plan needs to think about medical planning needs. Think about your prescriptions long term care. And guess what? Probably even some life insurance. What if you get sick? What if you die too soon? How you gonna make sure it doesn’t bankrupt? You, you just gotta have a plan. That’s it, man. These are advisors out there.

Mike:

They’re great people. But all they worry about is growth and accumulation. If your advisor’s sitting there saying, don’t worry, you got enough money. Guess what? You may have enough money, but you don’t. You need one of these. You need a written income plan. You need a healthcare plan. And then you need pot of honey. Number three, you need a tax plan. That’s specifically addresses is I R a exit strategies. And when I say IRA, I’m kind of lumping in like an IRA and a 401k and a 4 0 3 B and a 4 57. We kinda lump ’em all together. Cuz they’re all like the same thing. But you need an exit strategy. That minimizes tax is minimizes tax super important. If you ignore this, you will get puled with taxes later in life. We don’t want that. We do not want that. We want you controlling taxes both today and tomorrow in this couple’s case, right?

Mike:

What happened? I said, Hey, we can help you put that together. And I showed him how we can help you put that together. We showed him how and we can help you put this together, showed you how, but heads up tax planning. You kind of have to address that every year. You know, you could put together kind of, I think this is what we wanna do, but we’re gonna have to really tweak that on an annual basis. Here’s the deal was their advisor, right? This couple called John and Mary did John and Mary have enough money. So when their advisor said, I don’t worry about it. You got plenty of money. Did they have enough money? Yeah they did. But they were still unsettled. They still weren’t comfortable. They didn’t have the confidence that they wanted. They’re getting ready to retire. That’s a big step.

Mike:

They wanted the confidence that they’re gonna be okay. They had these same big three fears that most of us do. And guess what? They’re normal, right? You might say, oh my gosh, Mike, I have those same fears. You are normal. It’s okay. But the key is, have you address those fears when it comes to making sure your money lasts? Do you have that written retirement income plan? Do you have a plan when it comes to your healthcare? Do you have a plan? And when it comes to your taxes, do you have a plan you need ’em right. And if you have these plans, guess what? Like John and Mary you’ve got add enough money and now you can have confidence. Your money will last. You won’t give a whole bunch. You won’t be over taxed, right? You’ll pay your fair share. Not anymore. If something happens to your health, you’ll be okay. Those are the big issues in red. Those are three bad. There are three big bad mean bears that are hangry on the green. Those are our pots are hunting and make. ’em Better. How about you? How you doing with your retirement planning? Make sure you got these plans. All right. That’s this week. See you again next week.