fbpx

Ask Us Anything Part 2

Ask Us Anything (Part 2)

Originally aired 4/14/2021

Watch

We love answering your questions so much on the Get Ready For The Future Show that we’re back for round two… The floor is yours to #AskUsAnything (again)!

You’ll learn:
– Answers to YOUR questions about retirement, investments, and your money
– Tips, strategies, and straight talk to help you on the road to financial independence
– Investment insight from LPL’s Chief Market Strategist, Ryan Detrick

Downloadable Content:

Download the Retire 2021 Checklist

Links:

Workplace Financial Wellness with Moneyworks

Webinar – How to Reduce Taxes Before Retirement

Fastest Four Minutes in Finance

Listen

SHOW NOTES

Ask Us Anything – Retirement

  • This week is Retirement Planning Week, so what better time to answer your questions about retirement, investments, and your money.
    • And later we’ll be joined by special guest Ryan Detrick, Chief Market Strategist with LPL Financial.
  • The first question we’re kicking off with is from one of our listeners, Joan. She tuned in to our Social Security show last week with Mary Beth Franklin and sent us some questions.
  • Regarding drawing on an ex-spouse. What are the rules around that? Do you need to be retired (not working)? Past retirement age?
    • If you are divorced, your ex-spouse can receive benefits based on your record (even if you have remarried) if:
      • Your marriage lasted 10 years or longer.
      • Your ex-spouse is unmarried.
      • Your ex-spouse is age 62 or older.
      • The benefit that your ex-spouse is entitled to receive based on their own work is less than the benefit they would receive based on your work.
      • You are entitled to Social Security retirement or disability benefits.
    • If you have not applied for retirement benefits, but can qualify for them, your ex-spouse can receive benefits on your record if you have been divorced for at least two continuous years.
    • If your ex-spouse is eligible for retirement benefits on their own record, we will pay that amount first. If the benefit on your record is higher, they will get an additional amount on your record so that the combination of benefits equals that higher amount.
    • If your ex-spouse was born before January 2, 1954, and has already reached full retirement age, they can choose to receive only the divorced spouse’s benefit and delay receiving their own retirement benefit until a later date.
    • If your ex-spouse’s birthday is January 2, 1954 or later, the option to take only one benefit at full retirement age no longer exists. If your ex-spouse files for one benefit, they will be effectively filing for all retirement or spousal benefits.
  • You can ask us anything, too! Email your questions to info@getreadyforthefuture.com and we’ll answer them on the show!
  • I’m trying to retire this year. What do I need to do first?
    • We’ve got a checklist to help walk you through the process!
    • Click here for your free copy.
  • I’m a teacher / firefighter / police officer – what do I need to know about retirement?
    • Employees of the state have nuances to their retirement that others may not have.
    • Pension options – don’t make that decision by yourself.
    • Drop or t-drop for teachers.
    • Working with an advisor who has experience planning for people in your field can be extremely beneficial.

Interview: Ryan Detrick

  • With us today, as he is every month, is LPL Chief Market Strategist Ryan Detrick!
    • Ryan, how are you?
    • A quick survey of LPLResearch.com shows some headlines and phrases like: “Improving Economic Conditions,” “Improving Economic Conditions,” and “Goldilocks First Quarter.”  But our favorite is “Best Economic Conditions of the 21st Century!”   The obvious question: “Are things really that good and if so, why are so many people fearful of the markets and the economy?”
    • Let’s take these one at a time:  The Best Economic Conditions of the 21st century relates to a record reading of the Purchasing Manager’s Index.  What does that mean and why is it important?
    • LPL Research has increased its forecast for GDP growth from the 5-5.5% range to 6.25 to 6.75%.  What’s behind that very optimistic forecast?
    • Meanwhile, all the growth expectations for the economy seem to be putting pressure on the bond market, and accordingly, you expect bond yields to rise as high as 2% on the 10-year treasury bond.  Are you expecting inflation to drive those higher yields?
    • With all the optimism, you still have the forecast for the S&P 500 fair value between 4,050 and 4,100, which is roughly where the market is today.  Are you saying the economic outlook won’t necessarily lead to higher stock prices?
    • Aside from the U.S., economic conditions globally seem to be improving as well.  But your team still seems pretty cool toward developed international stocks.  What are your thoughts there?
    • Finally, what is your assessment of where we are with the pandemic, and what are the negatives investors should be on the lookout for?
  • If you enjoy market updates, you can now get them delivered straight to your inbox!
    • Click here or text FAST to 501.381.5228 to sign up!

Ask Us Anything – Investments, Financial Wellness, and Important Decisions

  • We’re kicking off this segment with a question from our social media! Tim asks, “We hear a lot about new investment vehicles, digital currencies, SPACs, and NFTs. Are these investments someone should have in their retirement portfolios, or are they more short-term, high-risk offerings?”
    • Some of these things aren’t even available for the average investor.
    • If you don’t understand it, don’t invest in it.
      • If you can’t sit down and explain to an “average joe” what it is, you probably shouldn’t bet your money on it. 
    • Hitting a home run is not going to cause you to be financially independent in most cases.
      • Slow and steady wins the race.
        • Diversification
        • Asset allocation
        • Be strategic
      • Homerun hitters are also the biggest strikeout guys. 
        • A diversified portfolio is like a diversified baseball lineup. You’ve got to have the guys who can hit the singles and doubles, too.
  • I’m a business owner – how can I help my employees?
    • Here’s the truth:
      • 78% of Americans live paycheck to paycheck
      • Nearly half of Americans spend time at work on their personal finances.
    • Moneyworks Financial Wellness
      • The GenWealth team comes to you (virtual options available) and helps educate your employees on their options, smart money decisions, and more.
      • Topics such as:
        • Budgeting and debt
        • Company-sponsored plan
        • Money milestones
        • Ready for retirement
        • Social Security
        • Financial planning
      • Click here or text WORKPLACE to 501.381.5228 to get started.
  • What happens to my money when I die / if I can’t make decisions for myself?
    • That’s really up to you
    • If you have a plan in place…
      • You’ll have a beneficiary on qualified accounts
      • You should have “transfer on death” designations on non-qualified accounts
      • For more advanced planning and to exercise control on how assets are distributed, you should consider a trust.
    • If you don’t have a plan in place…
      • You run the risk of dying “intestate” which is a legal term that basically means without a beneficiary.
      • Essentially, the state of Arkansas dictates how your property is dispersed if you don’t properly plan.

Ask Us Anything – Care and Taxes

  • How do I pay for a nursing home or other care?
    • We’d actually change the question to How do I keep from going to the nursing home?
    • Not being insured can be the single biggest devastator of a financial plan, specifically in terms of generational wealth.
    • A healthy 65-year-old couple retiring in 2019 can expect to spend more than $387,000 for retirement health care costs, not including long-term care (HealthView Services Financial).
    • If you do need long-term care, the costs can add up quickly.
      • Costs average:
        • Assisted Living – $48,000 / year
        • Home health aides – more than $52,000 / year
        • Private nursing home care costs – over $100,000 / year.
          • *2019 GenWorth Cost of Care Survey
  • What’s the best income strategy for minimizing taxes?
    • This depends on the types of accounts you have.
    • Qualified money is taxable whenever you take it.
    • Non-qualified money is subject to capital gain tax, which is generally lower (currently) than the ordinary income tax rates.
    • Social Security: as little as none or as much as 85% of your Social Security income is subject to tax, depending on several factors.
    • You can generate tax-free income from Roth IRAs and tax-free municipal bonds.
      • However, the tricky situation is how you get dollars into either of those instruments.
      • For instance: converting a traditional IRA to a Roth triggers taxation. The Roth will grow tax-free, but you can’t avoid the taxes on the principle.
    • In certain cases, gifting to charity can reduce your taxable income.
  • Webinar – How to Reduce Taxes Before Retirement
    • April 22nd at 6:30 pm
    • Click here to sign up or watch the replay.

FINAL THOUGHTS

    • It’s good to have questions.
      • You’ve worked hard for your money.
      • It’s good – healthy – to have questions about how it’s being put to use.
      • If your financial advisor doesn’t answer the questions you have about your money, it’s probably time to find someone who will.
  •  
    • We don’t expect you to know all of this on your own.
      • Unless you’ve spent years studying the behavior of money, how would you know?
      • Just because it’s called “financial independence” doesn’t mean you should have to go it alone.
      • Being “good” at money isn’t knowing something you were never taught, but choosing a team you can trust to guide you through it.
  •  
    • Webinar – How to Reduce Taxes Before Retirement
      • April 22nd at 6:30 pm
      • Click here to sign up or watch the replay.