[00:00:00] Speaker A: Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
[00:00:17] Speaker B: You're tuned into the Retirement Planning Pipeline, the show that helps you take control of your financial Future. Whether you're 5 to 10 years from retirement or just getting started. We've got the strategies, tools and experience to help make the most of your nest. Eg.
Retirement planning specialist David Pipes is a trusted voice in retirement planning, helping Americans navigate 401k rollovers, income planning, tax strategies and everything in between.
Now let's dive into today's show and start paving the way to your smooth retirement. Alongside retirement specialist David Pipes, here's your host, Jim Tarabakia.
[00:00:51] Speaker C: Hi, everybody. Welcome to this week's edition, a brand new episode of the Retirement Planning Pipeline, the show that delivers expert insights, actionable advice and real world financial strategies to help you retire confidently and comfortably. Thank you for making our show a part of your weekend. I'm your host, Jim Tarabokia and retirement planning specialist David Pipes will be joining us in just a moment. Retirement readiness check. How to make sure nothing slips through the cracks before and during retirement. Coming up on today's show, the most important steps for people close to retirement. Plus Social Security COLA for 2027 and forgotten 401ks. But first, before we get the show started, I want to encourage our listeners to go ahead and schedule your 100% complimentary consultation with retirement planning specialist David Pipes today. It's a free offering just for listening to this show. Our listeners can meet with us to review their own financial situation for your family or for your business. And there's absolutely no obligation. Visit retirement planningpipeline.com to get started. All right, David, welcome in. Let's get the show started.
Could you be sitting on a forgotten 401k? Millions of Americans are and might not even know about it.
[00:01:59] Speaker D: And I think it's kind of messed up on the retiree side because you should be, you know, that should be something that should be talked about from the company, right? Because first of all, 401k companies only have certain options. You only have certain, you know, funds that you can actually put your money in, right? Whether the mutual fund is going to be more bond related or a target date fund or, you know, things like that.
But the second thing is, is that, you know, with this money sitting in there, each fund has different Fees, right? They have expense ratio fees. They have management fees. So you don't really know. Obviously, you know, what you're spending inside of that 401k. And that even goes along with 403bs too. So, you know, if anyone in the area has 403bs, I've been coming across a lot of those 403bs as well. TSBS, 401ks, they're kind of all in the same.
The same frame because, you know, you have company contributions or. And then you have your own contributions. And. And with that being said, you've got a lot of, you know, diversity on what you can do as far as. But I see a lot of Americans, Jim, they're not.
They're not educated, right? People don't educate them, okay, on what they can do with their 401k. So when we talk about, hey, what.
What options do people have, right, when they have an old 401k to make a more profitable asset, I'd say, first of all, look at it and get someone to overlook it, okay? And that's one thing that I think I push the most and what I do the most of is that's the first thing I say in my seminars when I meet a client. Look, do you have a 401k? If you have a 401k, you really need to get it checked out, period. And I actually, I have small little booklets and small little magazines on some of the ways that old 401ks can actually hurt you. So if you're listening to us now and you'd like, you know, you know, a free sample of one of those, or to set up an appointment to look over that 401k, or let's say you have a couple 401ks and you want to look over them to see if you're in the right assets in the right funds. Maybe you just don't know what to do with it or down the road to do with it. Give me a call, 850-565-1705. If you have any questions at all. Like, literally, I mean, it could be the most simplest thing, right? Hey, David, you know I'm in this fund. What does that mean? Okay. What does the target date fund of 2030 mean to me? Right? Or what does. What are the expense ratio of fees of my funds that I'm in? Any question at all, just give me a call and we can kind of go over that.
And I could at least sit down with you and see what you're in, what your old 401ks are in and how you can better them. Because having an old 401k is not good for you. Right? Really having money in a 401k in general at any age of retirement or pre retirement is not good for you. Because obviously the point of the 401k was for when you were young, for your lifetime to be able to put money in. Now it's time to roll that 401k over and have more options for you. So if you want more options for you and you know, more of a, more of a strategy, please call me at 850-565-1705. Again that's 850-565-1705.
[00:05:03] Speaker C: You kind of alluded to it there talking about rolling over 401ks and I was going to ask what are some ways that people could take away stress when it comes to rolling over those 401ks?
[00:05:14] Speaker D: Yeah, I just had a guy, Jim, had nine 401ks last week, just came in. Hey look, David, I need you to look at all these. I don't know what the heck I'm in, what do I do? Right. But that's why we're here. And you, and to point towards your question, Jim, the first thing you need to do is if you're looking at a 401k, looking at overlooking a 401k and what you're in is finding a fiduciary, find someone that is obligated, right, to look in the best interest to you, okay? Not to the client.
Sorry. Not to the, you know, the business, not to the corporation, but for you. And fiduciaries have that, that special rule, right? Where myself as a fiduciary, I literally look in my client's best interest at all times. It's never about me. It's never about the corporation, it's never about, it's about the client first. And it should always be like that. And I think 401ks are one spot where it can get kind of gray because 401ks can be left alone, which again aren't for the client, right? So if you have an old 401k and you're not contributing anymore, it should definitely not be there. Right? And I think we all know this inside your mind you're like, look, I was contributing and back then and you know, it was there, I don't know how to move it. Find a fiduciary, okay?
And myself as one of them. We, we can make the transition fast. It's non taxable event okay. When you roll it over, you never want to just take money out of the 401k. And we've talked about that on previous episodes, right? But you never just want to say, oh, I'm going to withdraw money out of my 401k. No, do it efficiently. Okay? Have a plan. All right? And that's what we do here. That's what I do specifically with a lot of my clients. And I think for a lot of you listeners out there, you're in that spot where you're like, oh, man, you know, I've got a 401k, I've got five 401ks, and I want to consolidate them. And that's the other thing too, Jim, is consolidation, okay? Not having five accounts to look at. Oh, I haven't looked at Fidelity in a while. Oh, I haven't looked at Charles Schwab in a while. You know, I haven't looked at Voya. I haven't looked at T Crep. You know, you don't want all these problems and all these websites and all these passwords to go through, make it easier on you, okay? And that's kind of where I really start with clients, is trying to make it easier on them. And I think that makes the job and that makes the plan a lot more easier. Right? When it's more consolidated and less diversified, you have an easier plan for the client. So again, if this is one of your worries, one or two worries, saying, hey, look, I'm worried about my 401ks, I don't know how aggressive I am in there. I don't know where they're at. You know, I'm getting out of retirement. Where should they be? Or maybe it's, hey, look, I've got some money, you know, that I've had in there for a while. I don't know how to roll it over. I need help, David. What do I do? What are some planning steps? Please give me a call. Right? I mean, I can help out with anything, Any, any of the, any of those questions.
The numbers 850-565-1705. Again, that's 850- folks. 565, 1705.
[00:07:58] Speaker C: For the record, I did do the math. 40 years of working over your 40 year career. If you change jobs 13 times, you're changing jobs every three years. So you could be rolling over your 401k every three years. So again, give David a call if you have any questions about your 401k, what you need to do with it, how you can consolidate all of these accounts. That's what David's here for. Retirement planning isn't just about saving more money. It's about organizing what you've already saved. If you've accumulated multiple retirement counts over a long career, bringing them together into a coordinated strategy could really help simplify your financial life and make it easier to plan for retirement with confidence. If you've changed jobs a few times over the years, as we mentioned that number, you change jobs every three years or so, and you're not quite sure where all of your retirement savings are or you're wondering where it makes sense to consolidate your accounts again, we'd be happy to help. So give us a call today at 850-565-1705 or visit us on the web at retirementplanningpipeline.com and schedule that free no obligation consultation. Coming up later, if you are five to 10 years from retirement, we have a look at some of the things that you should do to prepare for the next phase of life. But up Next, Social Security Cola 2027 this is the Retirement Planning Pipeline. We're back in a moment.
[00:09:14] Speaker B: Visit Retirement Planning Pipeline to schedule your free, no obligation complimentary consultation today. The retirement planning Pipeline will return in just a moment.
[00:09:31] Speaker A: Retirement should feel secure, not uncertain. If market swings have you feeling uneasy. You've probably heard about annuities, but what you are aren't they telling you you deserve the full story. That's why we created a free guide that explains the good, the bad, and yes, even the fine print. Inside you'll learn how annuities can create guaranteed lifetime income, what fees and surrender charges may apply, how the different types of annuities really work, and whether an annuity makes sense for you. It's clear, straightforward information so you can make a confident decision. Call Amerilife now to get your free guide to annuities, the good, the bad and the fine print. Call 866-554-9546. That's 866-554-9546.
[00:10:10] Speaker B: Silex annuities contain withdrawal charges, interest and bonus recovery and market value adjustments that may apply to withdrawals made during the withdrawal charge period. Silax annuities are products of the insurance industry and not guaranteed by any bank nor insured by FDIC or ncua. NCUSIF Not a deposit not insured by federal government agency. Guarantees are based on the claims paying ability of the issuing insurance company. Restrictions apply. May only be offered by a licensed agent. Welcome back to the Retirement Planning Pipeline alongside retirement planning specialist David pipes. Here's your host, Jim Tarabokia.
[00:10:40] Speaker C: Welcome back to the Retirement Planning Pipeline. Thank you for making our show a part of your weekend on WCOA News Talk 104.9, with new episodes every Sunday at 10am and as we dive back into today's show, a reminder, if you like the content we're providing, be sure to subscribe to the YouTube page YouTube channel.com and search retirement Planning Pipeline for weekly video highlights and special content. Most retirement plans and accounts for they don't account for market risk and inflation and sequence of returns. Far fewer accounts for the one expense that has the greatest potential to wipe out a lifetime of careful savings and that's the cost of long term care. And nearly every American heading into retirement is dramatically informed about what the cost of long term care really looks like. So don't get caught. Schedule that free no obligation consultation today by visiting retirementplanningpipeline.com let's talk about Social Security. Could a bigger Social Security raise be coming in 2027? Here's what retirees need to know. Every fall, millions of retirees eagerly await the announcement of the next Social Security cost of living adjustment, or COLA. Early forecast suggest the 2027 increase could be larger than than the 2.8% adjustment beneficiaries received for 2026. But a bigger raise doesn't necessarily mean that retirees are getting ahead financially. So David, let's talk about why the projected increase matters, how it's calculated, and why a larger COLA is often a sign that inflation is still creating challenges for retirees rather than giving them a reason to celebrate.
[00:12:13] Speaker D: Yeah, I, I don't think that that COLA is, I think it's more of just a counter base on what they can do to make it a little bit easier on retirees, which they should. But I, I think it's generally creating it harder. I mean, I, I don't see how you can say, okay, the inflation was this much this year and now it's like, okay, well, I get more money. No, I mean things are costing more. So, and, and inflation on everything isn't inflation on some of the main, you know, you know, cost of living? Like, you know, I mean, I'm, you can talk about eggs and things like that. I mean, those have went up way more than just 2 or 3%. So I think that, you know, we've got, we've got to find out what is super, super important when it comes to how to help retirees. But I think the one thing is fixing problems, really having a solution for The. The bigger problem. And the bigger problem is Social Security is not going to cover everything, okay? It's never going to happen. So if you're out there and you're thinking yourself, hey, I'm going to live off Social Security for a while. I'm going to wait to take it. You're only going to wait. It's only going to hurt yourself, okay? You're going to have to figure out a plan for your income, period. I don't care if you have no debt or you do have debt or whatever you have is going on, you're going to need income, okay? Especially in retirement. You're not home. I mean, sorry, you're not at work, you're at home.
So you're. You're going to want to go out, you want to go to lunch, you're going to want to go see the grandkids, you're going to want to go travel, you're going to want to, you know, maybe stop by the market one day, you're going to have time on your hands that you didn't have when you worked. You're going to spend more money. People think they spend less money retiring. No, it doesn't work like that, okay? You're going to spend more money. Now, your. Your debt might be further down, okay? So your fixed expenses might go down, but your variable expenses go up, okay? So I would really, really position people. I think Social Security is a big topic, but I don't think it's the biggest topic. And why I think that is because people aren't looking at the. What's. What has to happen, okay? And I think Americans are struggling right now because Social Security is not covering everything like they thought it would, and they're mad about, you know, well, it's not going to go up enough. It barely pays me. Well, yeah, I mean, that's why the bigger problem is making a solution of having income other than Social Security.
Not a lot of people have pensions nowadays, Jim. Okay? So these.
At this time in life, at this time and period of, you know, the period of the year of 2026, right? We've got to understand that if we're retiring soon or we already retired, you've gotta create an income plan. And I think every client that I, that I come across just thinks to themselves, well, I could just take out money when I want to take it out. That's not the income plan, okay? So just like your Social Security is, hey, look, you know, it's a plan of this much amount for the rest of your life. You've got to create a plan like that to cover a lot of those expenses. And then the rest of your money you can let grow or do whatever you want to do, but you have to split it up into income and growth. And I feel like that's the bigger problem. People want to talk about Social Security or. Oh, well, it's getting harder for retirees. Yeah, but it's getting harder for retirees because your money that's put aside is also getting eaten alive. Right. So if you have money in a savings account or money in bonds, you know, you're. The inflation's eating it up, okay. Cause now you don't have the growth that you did back then when you were fully in the stock market.
Now you're getting just torn up. So the majority of your asset is literally depreciating because of the inflation.
So I think the inflation part hits your other part more than it hits your Social Security in retirement.
[00:15:42] Speaker C: Sure.
[00:15:42] Speaker D: Right. Because if you think about it, Social Security is just an income.
Okay. Your inflation's eating up what your asset is, your bigger asset.
[00:15:50] Speaker C: Can I ask you a question to that point, though, when you talk about Social Security? It was never meant to replace income, and we've talked about that before on this show. What do you think the best strategy would be, though, to maximize your Social Security? If you're talking about Social Security in that context of it not replacing income?
[00:16:07] Speaker D: Yeah, I think that maximizing it first of all is taking it early. That's, that, that's the key point. I mean, there's, there's going to be days when you, then you think that it's better to take it later because they, they're, they're telling you that you're going to get more money down the road, but the odds are, you know, that you only have certain amount of years to use it. Okay. You're, you're 62, 65, 67.
I mean, you know, you're not 28 anymore, right. So you're going to have to use that money. And I think that maximizing it first of all is taking it early. And that's the number one key point. But I think that, I think people are so worried about having it higher when. And waiting. It's not going to do anything for you. Inflation is just so high anyways. Okay. So, you know, don't let that beat you up inside. I think that what you really need to focus on if you're out there listening is, is, you know, understand what your goals and needs are.
Take Social Security early and Then fill in the rest. And once that's taken care of, really, your life's pretty simple in retirement. I mean, every client that I have cannot stress enough how easy that their life is now. Right? Because they take care of the problems that. That are there. I think the one big problem, though, Jim, and you know, you're talking about maximizing Social Security. People are so focused on Social Security. Social Security is a small amount, man.
[00:17:25] Speaker C: Right, right, right.
[00:17:26] Speaker D: 35% of your income is supposed to be taken care of by Social Security. 35%. That is nothing.
[00:17:33] Speaker C: Yeah.
[00:17:33] Speaker D: So why are you worried about whether you take it next year or this year?
It's a fraction of what you're going to need in retirement. Worry about the bigger problem. Take the money early and worry about the bigger problem. Okay? And why you take the money early is because now you know that if you don't use it, you can utilize it down the road, maybe invest it or however you want to do it, but now you take less money from your investments early.
[00:17:55] Speaker C: Well, what is the bigger problem, though? Let's add context to that as well.
[00:17:58] Speaker D: The bigger. Now I was going to get into that, Jim. The bigger problem is understanding how much you need after Social Security.
[00:18:05] Speaker C: Okay?
[00:18:06] Speaker D: That's the biggest problem. But no one wants to talk about it because advisors. What? Oh, I don't want them to take out that much money because it's going to start depleting the account faster than I. Faster than I thought or faster than it's there. But in reality, it's not about the advisory. It's not about the corporation. It's about you and your income.
[00:18:22] Speaker C: Right?
[00:18:22] Speaker D: What you want to spend, your grandkids, your son, your daughter, Right? The things that you want to do in retirement, it's not about the advisor's point of view, right? And I think that a lot of the times we're. We're seeing. Well, no, 99% of the times I'm seeing, everything's pitched on the same program, okay? This modern bonds, this amount in stocks, this mountain fixed portfolio, and we're going to take this much money out and it's going to last you this long.
It's like, when are we going to innovate and change the plan to make it better for the client? Because I don't know about you, but I don't want my money to run out when I'm 90 years old, okay? I want my money to be alive and well when I'm 90 years old. So how can I maximize growth to where when I'm 90 I can still have a million dollars in the bank, but how can I also make sure my income is set up until then?
That should be the plan.
Okay, and that sounds a lot better, right? Oh, my gosh, David, that makes so much sense. If I have my portion over here growing, okay, and it's maximizing, and then now my income's taken care of, so my Social Security had turned on early.
We put a small amount, maybe a pot of assets into the. Decide to take care of the bigger problem. Social Security is a problem, but Social Security is not the biggest problem. Okay? Social Security is very easy for me. I can sit down for five minutes and tell you if you ever have questions about it, you can, you can give us a call. You can sit down. I can send you a free pamphlet if you'd like, on why it's easier to take early. You're going to want to take it early for your benefit, not for the government or not for your, you know, your advisor's sake. But like I said, the bigger problem is that leftover money that you're going to need in order to live the retirement that you want.
And it's not to be spending down the asset. And I've helped plenty of people do that. So if you have questions about this or maybe something's popping up and you have that portfolio that I just mentioned, whether you're in bonds or whether you're in, you know, and, and you're, you're just, you feel off about it because you, you should feel off about it. It's just not the way anymore. Things innovate, right? Things get better. Cars get better, Advisors can get better, right? I mean, all these things in, in. In. In the earth and, and really on. In this country have gotten better over time. Why shouldn't your plan get better?
[00:20:29] Speaker C: Right?
[00:20:30] Speaker D: Why should it be the same plan as 50 years ago? It just doesn't make any sense. So again, you know, if you have questions about that, just give me a call. 850-565-1705. Again, that's 850-565-1705.
[00:20:46] Speaker C: Well, some common mistakes when dealing with Social Security. Claiming based solely on emotion, following friends advice.
That's a good one. Ignoring survivor benefits, failing to coordinate with retirement withdrawals. If you need further assistance with this, please don't hesitate to reach out. Visit us on the web@retirement planningpipeline.com David mentioned the phone number. Pick up the phone, give us a call. 850-565-1705. You're listening to the retirement planning pipeline
[00:21:13] Speaker B: helping you take control of your financial future.
This is the retirement planning pipeline.
[00:21:25] Speaker C: Every July 1, baseball fans are reminded of one of the most famous contracts in sports history. It's known simply as Bobby Bonilla Day. At first glance, it sounds like a punchline, a retired player collecting a paycheck long after leaving the field. But behind the headlines lies a powerful lesson about money, time and long term financial planning. I'm Jim Tarabok here for the Retirement Radio Network powered by AmericanLife. More than two decades after playing his final game from the New York Mets, Bobby Bonilla still receives a check from the team more than $1 million every year. Those payments began in 2011 and will continue through 2035. Back in 2000, the Mets owed Bonilla nearly $6 million. Instead of paying him immediately, the team agreed to defer the payments for more than a decade. In exchange, Bonilla would receive annual installments with interest, ultimately collecting far more than the original amount owed. Front office sports writer Eric Fischer explains
[00:22:22] Speaker D: further, this was a very unique deal. At the time. He still had 5.9 million left on his contract, and there was a mutual desire to not pay that all out in one lump sum.
[00:22:34] Speaker C: Whether the Mets made the right decision, decision or not, still being debated. But the arrangement highlights a principle that financial professionals discuss every day. The value of future cash flow. Many investors focus on growing assets, but successful retirement income planning is really about creating dependable streams of future income. Annuities, for example, provide income in the form of regular payments. And as Athene Chief Operating Officer Michael Downing explains, finding the right annuity could be a game changer.
[00:23:01] Speaker A: They should generally be an anchor of
[00:23:03] Speaker D: almost any portfolio in terms of the preservation of wealth. And so the things that customers should look at is the type of protection they need.
[00:23:09] Speaker C: As retirement approaches, investors face a critical question. Should they prioritize maximizing today's wealth or building sustainable income for the future? The answer often requires balancing both. So whether those payments come from Social Security, pensions or annuities, the goal is similar, turning today's assets into tomorrow's paycheck. Bobby Bonilla's contract is an extreme example, but it illustrates an important point. Sometimes the most valuable financial asset isn't a lump sum. It's a predictable stream of income that arrives year after year. Because in the end, smart portfolio management isn't just about accumulating money. It's about designing a strategy that supports the life you want to live. And that's something Bobby Bonilla reminds us of every July 1st for the retirement Radio Network powered by Amerilife. I'm Jim Tarabokia.
[00:23:57] Speaker B: Planning for retirement doesn't have to be overwhelming. Get expert insights, tools and personalized strategies to secure your future. Visit retirementplanningpipeline.com today, your retirement, you plan your peace of mind.
[00:24:14] Speaker C: This is the retirement planning pipeline. If you've missed any part of today's program or want to catch up or even listen to previous episodes, go ahead and subscribe and listen to the show in podcast form on Apple, Spotify or whichever platform you enjoy your podcasts. All right, stay with us because coming up, removing emotion from important financial decisions. But right now, as we do each and every week, it's time to unveil this week's Financial Wisdom Quote of the Week.
[00:24:40] Speaker B: And now for some financial wisdom. It's time for the Quote of the Week.
[00:24:48] Speaker C: And our Financial Wisdom Quote of the Week comes to us from American television host and producer Oprah Winfrey. And Ms. Winfrey says, quote, if you look at what you have in life, you'll always have more. If you look at what you don't have in life, you'll always have less. Our thanks to Oprah Winfrey for providing us with this week's Financial Wisdom Quote of the Week and reminder. If you like the content we're providing, subscribe to the YouTube page YouTube.com and search Retirement Planning Pipeline for weekly video highlights and special content. All right, good news. New Investment Accounts for kids. What parents and grandparents should know now. A new type of investment account for children is now available under a recently launched federal program. While the accounts carrying a politically branded name called the Trump accounts, it's maybe more helpful to think of them simply as government authorized investment accounts for kids designed to encourage long term savings and investing from an early age. If you're a parent, grandparent, or even someone who likes to help the next generation get a financial head start, it's worth understanding how these accounts work, who qualifies, and how they compare to other savings options like a 529 college savings plan or a custodial investment account, things like that. So let's dive further, David, into these accounts and how they actually compare to other options. And I would love to hear your opinion on these new accounts.
[00:26:07] Speaker D: Yeah, I think they're a great way to to start the a trend, right? Because I think not a lot of people think about what investing over the long term can really do.
And I think that pretty much every client that I have, you know, has grandkids.
And those grandkids are one of the most important things to them.
Okay.
So yes, Trump accounts are important, but look at the bigger picture, okay? It's for what it's for to, it's to include and to improvise and to show young investors. Right. And to show maybe parents and grandparents how a long term investment, a short amount.
Right. A very, very small amount can do over time. Right. You're talking about, you know, I mean, you put in, let's say a thousand dollars a year, you know what I mean? For, you know, let's say 10 years. Okay. And you invest that over 30, 30 years. I mean, you're looking at a huge compounding difference. Right. Double to triple. Whether it's savings accounts or savings account. Okay. People buy bonds, people buy all these types of things. But when you're able to get these accounts and you're able to invest in different funds and ETFs and mutual funds and in stocks, you know, you've got the advantage to really grow over the timeline of when the stock market is really great. And obviously we always talk about the stock market is great over the period of time.
[00:27:20] Speaker C: Right.
[00:27:20] Speaker D: Over a lengthy period of time. Right.
If you're a Darren, you're not just investing your money into the stock market at a full advantage. And if you are, you've got some problems. But I think that people miss out on what the long term investment does. And it's hard too, because you're thinking to yourself, you see people in corporations make a lot of money very, very fast. But you. When what small amounts can do, Jim, for, you know, for the grandkids and for kids is really, really what they're trying to push, which I absolutely love. Okay. I think it's a great way to think about it, you know, and, and it is a little bit different because you got to kind of put it away and think it's, it's there and I'm, I'm never going to touch it or it's for the kids at this time.
But what I love about some of the plans are, is that it gives that tax deferral basis until. And sometimes even tax free.
[00:28:07] Speaker C: Yeah.
[00:28:07] Speaker D: To the kids when they get in college. Right. Because when you get to that, to that college stage and you know, you need to take out money, okay. Those taxes that you would have paid. So you know, back then, now you can pay them as you want each tuition year, which actually helped the kids out, you know, and even if you can take it at a smaller bracket, right. When you're older and you're not making as much money, it gives you the flexibility and the freedom.
So these, these accounts are very, very, very good. And, and, and I think that they're only gonna, in, they're only gonna get better. I really do. I think that we're gonna see some increases in the potentials for what they can invest in. Right. Because I think now that they're so popular, right. New comp. More companies are gonna have to offer different, different plans, different funds.
So I think there's gonna be more talked about it. But I, I, I do think it's a big deal when it comes to, you know, the newer age and why I say things are changing, right? AI is changing things and everything else is changing. I think that obviously inflation is going to affect us, so we're going to need more money in the future and the only way to do that is to invest with it. Right. And the positive correlation with inflation is literally the stock market. Right. The common stock. Right. So I think that having the money at a young age, if inflation's, which is always there, you're going to obviously see your dollar increase and dramatic amount over the time. And whether you're using it for, you know, education at an early age or a later age, it's always going to benefit, Jim. It's always going to benefit.
[00:29:39] Speaker C: Yeah. So the thing about it too, that I, I wonder with, with younger kids and, and of course with grandparents and whatnot, is this something that will eventually, if it's proven to be successful, will this replace those old college funds that parents used to start for their kids when they were very little?
Or is this sort of just like another investment account that again can compound over time?
[00:30:06] Speaker D: I think they'll replace the full, the full fund and I think that if they don't, they'll make new ones that do.
[00:30:12] Speaker C: Yeah.
[00:30:13] Speaker D: And, and you know, because I think that now we're seeing some problems with what's happening when people are graduating college and not having the right income. I mean, people have $200,000 of debt and already making 40k, $40,000 a year. They're gonna, I mean, I knew someone that paid 20 years of college debt, okay. And he just got it paid off.
So I think that people are seeing that some of the risk reward scenario of getting a college degree because everyone's getting them, is not the same. Okay. So taking up and being able to have that money to buy that college degree, just putting in a small amount at an early age is super, super, super nice. When you get to that point where you, you do want to, you know, pay for that college at least half of it's done right. So that way that, you know, the interest doesn't really hit hard.
I think it's going to replace everything. And I think sooner or later we're going to have high enough, we're going to have high enough limits to where people can do whatever they want to do. And, and why I think that too is, you know, I don't think tax is going to be eliminated from it, but I think we're going to see some movements towards tax advantages. I think we're going to see some movement towards the kids paying, you know, being able to have the kids bracket being paid instead of the parents.
Because, you know, obviously the government loves their, their taxation in their money. But when it comes to the parents putting money away, then having it tax deferred, then having it taken out, it just, it just hurts the parents even more. So I think that if we can change the system where it's a lower tax bracket or maybe even put a different tax bracket in there, I think that that will definitely help out. But I think that education is something, and I've always thought this education is something that betters this country well.
[00:32:02] Speaker C: And also I want to go off on that point too. I hear this a lot from certain circles where they say, well, college is a scam, college is a waste of time, you shouldn't go to college, you should go right into the trades. And that's okay to say that, but if somebody is really smart, if somebody is very gifted, or even if somebody maybe hasn't discovered what their actually actual gift is just yet, I think telling them not to go to college is very much the absolute wrong idea because you're preventing them from really reaching their potential now, Jim, it's getting hard. That's my, but that's also was going to be my next point. What also is sort of tough for people is that these colleges, when you could argue what is the actual scam, is that you have to pay so much money for these colleges now.
[00:32:45] Speaker D: Yeah.
[00:32:46] Speaker C: And so it's this time that we live in now, it's never been more important to figure out, okay, is this new Trump account, for lack of a better term, is this new Trump account going to replace college funds fully? Is it something that is a viable account that will compound over time that will make college less expensive for people, or is it just another government subsidized account that is out there and it's really not going to make much of a dent?
[00:33:13] Speaker D: Right. I don't think that, I don't think that college is a scam. What I think it's a scam for is to go get the degrees that they know that don't make a lot of money. And the reason why I say that is because if, if you want to be educated in something and some of those degrees that, that really offer the less credits or you can say less brain power to, to do can be learned without spending that much money, can be learned on an online course, or you can, you know, you can spend a quarter of the money that you spend to go to a college education.
And do I think that's the, that's, that's the, you know, the college problem, the education problem? No, But I do think that if you're going to get into a further education and you have the ability to do it, I do think that, that you need to be able to have a certain implement to where it could be advantageous to you. And what I mean by that is I'm not saying it can be free when you go and then you fail out. I'm saying that if you go and you pass, okay, maybe there should be some tax advantages or some tuition advantages. Hey, look, you know, you passed college, we're going to give you a refund of this back to your loan, okay?
There's got to be some sort of incentive for someone to go to college and say, hey, I've got to get this degree. But also I want to stay because I'm spending money and my loans are getting higher. And what, it's kind of like a life insurance scam. If you think about it as, as you keep paying that tuition and you realize the second or third year in, you're like, holy crap, my loans are so high I got to get the hell out. Right?
I don't like that part. And I think that's where we get to the point where you have to understand we need to help the education. We need to help what we do, okay?
We need to push people to want better degrees, right? We need those people, and we need to push people to have to want trades, right? And I feel like sometimes those people don't go into trades as fast as they do because they go into college and drop out in two or three years. And I think that's what's happening is, yes, the colleges are making their money because the people aren't graduating, right?
But then they go do a trade or they go run their own business or whatever they do now, they didn't even need it at all, right? So now someone else pays for their education. And, you know, and it goes through that route.
[00:35:30] Speaker C: Yeah.
[00:35:31] Speaker D: And I think that. I think that with this. With what Trump's doing with the Trump account, I think that it will incentivize people to get to that point where you have an incentivization of, okay, look, I've got some money to pay for some of my college. So it's not too hard on that second year where you did have that timeframe where you're like, hey, look, man, it's got to cost this much, and I'm gonna have to pay for it now. It's like, okay, hey, listen, we've got this money that is specifically for education that we put away for you. What do we want to do? Yeah, right. Do we want to get education and trade? We want to do this, we want to do that. I think it gives the person. I think it gives, you know, the child that's going towards college. I think it gives them more of freedom. I think. I think it just gives them the freedom to pick what they want. Because now it's less on what the parent wants, right? Because if the parent's paying, which is a lot of times happens, or you get a student loan and the parent backs it up. Yeah, you have everything. I mean, I. I actually went through it, you know, so you got to do everything the parent says. So it's like, okay, well, you get this degree, and it's like, oh, I don't. I don't want that. I mean, I changed degrees three times, right, Until I, you know, finally found what I wanted to do at a young age like that. Especially with the new ages coming up, you just don't know exactly what you want to do, do, right? So I. I think that it's more of an incentive for the people that are getting there, right? Saying, hey, look, now I. Look, that. That money's got to go towards this, you know, and. And it gives the parents more of a freedom to. To talk to the. To talk to the kid, you know? But I think that what. It's going to especially help with student loans. It's going to really, really help with student loans. And if anybody out there is looking for, you know, a plan that they want to give their grandkids or, you know, maybe even kids, okay. Or maybe set up something small, reach out to me. I mean, I could help out with that easily. And I've been seeing a lot of them. A lot of my existing clients are coming back to me asking about it, because I think that it's super, super important. And if it's if it's not a Trump account, doesn't matter. I mean, it can be a Cordell Savings Plan, 529 plan. You've got a lot of tax advantages that you can do. With that being said in college is a great thing, you know, but when it comes to what you're paying for, you need to, need to understand that part. And I think people are starting to really understand that now, which is why these plans are being made because the, the student loans are out the yin yang. So like, hey, we need to, we need to relax that, let's start putting money in. So if anyone has any questions about that or you want to set one up, maybe you just, you know, you want to see what it's like or you know, what funds you can go in. I've had a couple clients ask me, you can give me a call. 850-565-1705. Again, that's 850-565-1705.
[00:38:11] Speaker C: And we can debate all day long whether colleges is viable or not for people. We could talk about all these different accounts, which one might work, which ones maybe don't work, we can talk about that. But I think just in general, everybody will agree that right now, where the education system might be failing the United States or in failing children and high school kids, middle school is the lack of financial literacy and understanding what these accounts can do and how they can, can compound. So anyway, if you have any questions or want further clarification on these new accounts, pick up the phone. David mentioned the number 850-565-1705 or visit us on the web at retirementplanningpipeline.com and schedule that free no obligation consultation. Coming up next important steps for people close to retirement. This is the retirement planning Pipeline. Thanks for listening. We'll be right back.
[00:39:02] Speaker B: Your retirement questions deserve real answers. Call 850-565-1705 to schedule your free no obligation consultation today.
Missed part of today's show, the retirement planning Pipeline is available wherever you get your podcasts
[email protected] welcome back inside the
[00:39:33] Speaker C: Retirement Planning Pipeline, the show that delivers expert insights, actionable advice and real world financial strategies to help you retire confidently and comfortably alongside retirement planning specialist David Fipes. I'm your host, Jim Tarabokia. And once again, thank you for making our show a big part of your weekend. On whichever platform of your choosing, your retirement should be built around your goals, your lifestyle and your future. That's why we're offering our Listeners the opportunity to schedule a complimentary retirement and financial consultation with our experienced team. Visit retirement planningpipeline.com to learn more. All right, final segment of today's show, important steps for people five to 10 years from retirement. So if you're in your 50s or your 60s, you may be wondering or dreaming of how to retire in the next five to 10 years. Don't let economic uncertainty scare you away from your goal. In fact, you may find that you can retire even earlier, regardless of the exact timing. Congratulations. You're in the home stretch of a lifelong race to this exciting time of your life. So if you're in that quote unquote retirement red zone that's either within five years of retirement or you've retired in the last five years, please give us a call so you can test the strength of your plan plan and we can help you perform a free analysis. All right, the first budget, inventory, current spending and projected into the future. Why it's number one, you can't know whether you're ready to retire until you know what retirement will cost. Everything else, how much you need to save, how much income you'll need to generate, how much risk you can take even when you can retire. It all starts with understanding your spending. And without a retirement budget, every other decision is just an educated guess. Second, retirement tax planning. It's not what you make, it's what you keep. Many people spend decades accumulating assets but very little time planning how they'll withdraw them efficiently. A well executed tax strategy can potentially save tens or even hundreds of thousands of dollars over a 25 to 30 year period. And finally, maintain the right asset allocation and start income planning. Retirement isn't about growing wealth anymore. It's about turning wealth into a reliable paycheck. And as we mentioned earlier in the show, you can't rely on Social Security. The transition from accumulation to distribution is one of the biggest challenges that retirees face. And many people have investment plans but never actually develop an actual retirement income plan. So let me ask you this, David. These are all very compelling because they answer the three questions nearly every pre retiree asks. How much will I need? How can I keep more of it? And how do I make it last?
[00:42:02] Speaker D: I think the number one, how much do I need? First of all, we have to. You have to talk about the client goals. You have to talk about your goals. I mean, no one's going to know how much you need unless you really sit down with a planner and we understand your goals first.
What I mean by that is what do you like to do on your free time, get to know your client? I mean, every client that I have, I know on a personal level. Okay. And yes, obviously, you keep business and personal a little bit separate, but you have to know them on a personal level. If you don't, then you're not getting to know your clients, and you're not understanding what they want in retirement, what they want in their lives, how they live their life, what they like, what vacation they like to go on, how many grandkids they have, what they want their money to go to.
Right? So what they want to spend money on. Right? So all these things matter, and that's what shows really how much you'll need. Now, I usually typically throw the range in there whenever you were working and you had that amount of money. Right. That you were bringing in. And I usually go off of how comfortable you were with that. And then we can start from there. Okay? So we need to make up that goal immediately. So let's say you're making a hundred thousand dollars, okay? And now you lost it all. It's just security, maybe like 40 grand. Okay. You need to make up $60,000 a year.
I always go by that number because people are like, well, I don't have much debt. It doesn't matter. I mean, if you don't use it and we give it to you, we can reinvest it. Right? But make sure that you're not limiting yourself on retirement. I think that's one of the worst places you can ever be in is when you limit yourself.
You know, I always want a client to live that lifestyle without having to worry about it.
One of the coolest things is when you get to talk to a retiree like yourself and say, hey, you know, what do you want? You can make it happen. Okay. And I think maybe even make it happen even higher than they thought. Because a lot of the times, advisors even tell you, well, we can do this or that, and it's like, no, that's their goals.
That's not your goals. And that's what happens a lot of the times is I'm sure a lot of you retirees out there have the same problem. Your portfolio is based on what the company or the corporation thinks you should do instead of what you think you should do. And I think it's just that simple. And it doesn't need to be ran like that. Right? It should never be ran like that. It should be the client's goals first, and then the. The, you know, assess those goals and make a solution. From that problem. What's not really a problem? Let's just say it's a, you know, it's a, it's a switch up or change in lifestyle, right? Because you're from going from working to, to retirement. You want to be able to switch that lifestyle up if the enough, most efficient, ineffective way.
So second though, Jim, is, is really, when you're talking about like you asked, how do I keep more of it?
[00:44:43] Speaker C: Right?
[00:44:43] Speaker D: And I think when you keep more of it, right, how to keep more of your money that you have invested, you got to split up income and growth. And I'm going to say this probably 10 more times in this episode because I really think people don't. I'm going to drill it in your brain.
The majority of every single episode, 99 of advisors aren't doing it. They're just not doing it. They're not giving the people what they need. Okay. And what the problem is, is they want to be selfish. Right? The corporation trains these people to be selfish and to keep all the money in there and, and give you a certain amount, whatever you need, and then you don't. Then you're living the lifestyle of what the corporation wants you to live. Oh, I'm gonna. You, you can, you could get five grand a month. That's that, that's, that's what we can do for you until it lasts forever. Okay. When's the last time you asked that advisor, what. Show me the plan. Show me how in the heck that works and show me which part of this. No, you don't ask that because you just trust the advisor or you trust the company. Right?
And that's what they're living off of, right? Is all those billions of billions of dollars that are all invested in these companies for retirees and they're just sitting there and it's, that's why we have the biggest wealth transfer of the entire world happening in the next 10 years. Because people lived like that. Okay? People took their money and they didn't use it for retirement.
All right?
That's not the way you want to live. And I, we have a different generation growing up now, right? People want to travel. I mean, I have retirees that are 80 years old and retirees that are 60. And my 60 year olds want to travel a lot more than my 80 year olds, obviously. Right? And the 80 year olds, oh, I'm good. I don't want anything because of the kids. Whatever.
60 year olds are so much different. We have a new age coming about, Jim, and I love it. I Love it. I think it's awesome, right, because to be able to utilize and spend what you did, right? And you've grown your kids up, right? You did what they needed to do. You put them in the position to, to succeed in their own way. And then now you can worry about youth. Now you can really push the income side about what you want to do instead of what the company wants to do or what the kids want. Right? It's about your retirement. So I think splitting up into growth and income and satisfying what you need first in the income port portion, that leaves you all the growth room you want, right? You gotta, you gotta say you got a million bucks, okay? And a lot of people out there. Average is around a million dollars.
Okay? Let's say we take 500 grand, we pay, you know, 30 or 40 grand a year for the rest of your life. Okay? So you take care of that. Yeah. Social Security is coming in. You got about 100, $120,000 a year coming in. And you guys are living the dream, traveling whenever you want, going to the grandkids, doing whatever you need to do.
The other $500,000 is compounding and growing. So the next 10 years, the rule of doubling, right, is seven to 10 years. All of a sudden you're looking at a million dollars again in 10 years, but you're still getting paid out on that left side. Right? That 500 grand that you put away for income is still paying out. So now you're generating still 100, $120,000 a year when you're 75 years old. But now you still have a million dollars in growth.
These are the things that you have to look at personally and mathematically, mathematically make sure that your growth is growing and you're not just taking money out and dwindling your portfolio. I see. All the time. And this is a big problem in the United States right now because no one wants to talk about it. But I'm here to tell you that there's a solution to that problem and it's splitting up growth and income. It is. And it's going to compound and maximize one side and it's going to make sure you're secure on the other side for the rest of your life. And then when you're 80 years old, you don't need that income anymore. Maybe you only need 60k a year or 80k a year. Okay. The other one, you can invest however you want. Okay? But the solution was you're getting paid and now you're keeping more.
Right now that growth Side has gotten back up to a million to where if you want more income, let's position more, right? You see how you're balancing the equation out.
But you can't do that when everything's in one pot and we talk about buckets all the time.
Sadly, everyone's portfolio, everyone's retirement assets are majority in what? The stock market.
Whether you want to look at it or not, you're in bonds or stocks or fixed income assets.
You are, right? I'd say majority of my, probably 80% of my clients, okay, have the majority of their money in the stocks. Not even bonds, okay? Now bonds even worse, okay? But with the stocks come risk. And I, and I love the stock market. I absolutely love it. You know, it's one of my favorite things. But the same time, for the retirees out there, it doesn't work like that, right? Stocks are great for their, for what they're great for, they're great for long term growth, okay? They're not, they're not great for you to take out money out in the next month or next year or the year after, okay? So stop treating it like that. Stop having your advisor treat it like that. Get someone to plan it out for your best interest and make sure, you know, your fees are, you know, more efficient. You're not paying as many fees as you would on the bigger account and then in the smaller account, right? Because when you were younger you had less money.
Understand how to break that up and really make sure it's tailored towards you, okay? And last but not least, I know we need to go over this one because this is important, right? Is how do I make it last?
And that goes along with what I literally do. Just said, okay, separate the growth and the income. You will always have room for more income down the road if you do that. But no one's doing it. They're keeping it in the same pot. Jim. Right? And this is where it's really frustrating because as a, as a math guy, right? So I think there's way more efficient ways to, to, to do it. And I think that obviously with the success that, that I've had here with helping clients, I think that, you know, that's getting out pretty fast. And again, you know, I want to really encourage anyone that has any questions about whether you're, you know, want to retire now, want to retire in five years, or whether you just want to make a plan for retirement down the road, okay? Have, have some, have some thoughts, processes. Have, you know, think about what your goals are and your needs are. And then need someone to help plan those goals. Okay, let's stop looking at what the company says to do and start looking at what you want to do.
Right. Because if we put all of our, you know, all of our ties in someone's hands, it's never going to work out for you. It's going to work out for the person that's controlling the money.
Right. You should be controlling your money and educating yourself in the efficient way of what you're doing and how that money and how the portfolio is affecting your retirement, it should not be towards anyone else. Okay? So that's one big thing that I think we've got going on, Jim, and that we need to fix.
[00:51:26] Speaker C: That makes a lot of sense. And again, a reminder too.
Here's what happens when we sit down to review your retirement picture and why so many people find this process so valuable. We start with you. And again, David, he starts with you. We take the time to truly understand your goals, your concerns, and the kind of retirement lifestyle that you're working towards. Whether that means travel time with family, giving back, or simply having peace of mind, we build a clear, personalized strategy and you'll walk away with straightforward, easy to understand recommendations designed to help you move forward with confidence, no jargon and no confusion. And most importantly, we help you take action. A great plan only works if it's implemented. We're here to guide you every step of the way. So give us a call at 850-565-1705 or visit our website retirementplanningpipeline.com again, visit us on the web at retirementplanningpipeline.Com get started today and schedule that free, no obligation consultation. Final reminder, if you missed any part of today's show, don't forget to subscribe to the program and podcast form on Apple, Spotify or wherever you get your podcasts. Subscribe to the show on YouTube. Search Retirement Planning Pipeline on YouTube for clips and special content as well. Once again, thanks for listening. This is the Retirement Planning Pipeline. Have a great week everybody.
[00:52:41] Speaker B: Thanks for listening to this week's episode of the Retirement Planning Pipeline, the show that helps you take control of your financial future. Whether you are five to 10 years from retirement or just getting started. Retirement planning specialist David Pipes has the strategies, tools and experience to help you make the most of your nest egg, take control of your financial future and get started today by visiting Retirement planningpipes.
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[00:55:16] Speaker A: They say you don't know what you don't know, but a growing number of states are trying to fix that when it comes to finances. I'm Matt McClure with the Retirement Radio Network powered by Amerilife.
In high school, students are often required to take advanced math courses like algebra and trigonometry. But for years the basics of budgeting, bank accounts and savings have been neglected in the classroom. But that seems to be quickly changing. 21 states now require at least some form of financial education before students graduate high school.
One of those states is Nevada Governor Steve Sisolak recently told CNBC a great percentage.
[00:55:50] Speaker D: I think 50 some odd percent of Americans can't cover $1,000 emergency cost if it comes up without borrowing the money.
So it tells us that we need to invest more. We have invested $2.5 million from the state into these programs and to make sure that it gets out, we address
[00:56:06] Speaker C: access and equity so that everybody gets this education.
[00:56:09] Speaker D: It's not just reserved for the upper class.
[00:56:12] Speaker A: Mississippi Governor Tate Reeves also told CNBC he knows firsthand how valuable a financial education can be. He graduated with a degree in economics and worked in the financial arena before running for office.
[00:56:23] Speaker D: Which is one of the reasons that I'm so passionate about trying to encourage my fellow Mississippians and really my fellow Americans to make sure that financial literacy is available to as many people as possible, because I really do think it can help Americans have a better life.
[00:56:41] Speaker A: In New Jersey, Governor Phil Murphy says programs there start as early as middle school.
[00:56:46] Speaker D: There's a temptation that comes with a lot of different things that you all of a sudden think you can afford and you don't realize the consequences on the back end, whether it's physical items, whether it's bean stocks or whatever it might be. And so getting kids at the earliest ages possible, we think is critical.
[00:57:07] Speaker A: How well are the programs working? Well, it could be too early to tell. Moneyrates.com found mixed results in a recent survey, but its authors note that financial education itself is not a quick fix. So with more time, results could improve.
So how educated are you when it comes to your personal finances and planning for retirement? And are you going to pass down that knowledge to future generations? Those are key questions to consider as our financial lives become more complicated.
With the retirement radio Network powered by AmeriLife, I'm Matt McClure.
