Retirement Blind Spots That Could Cost You Thousands

TPIR Ep 111 Full Show.mp3: Audio automatically transcribed by Sonix

TPIR Ep 111 Full Show.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker 1:
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.

Speaker 2:
Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the Lgbtq+ community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom so you and your loved ones can have the retirement you've always dreamed of. A retirement you can take pride in, no matter who you are, where you're from, or who you love. So now let's start the show. Here's Matt McClure.

Speaker 1:
Well, hello there and welcome to another edition of Take Pride in retirement. Matt McClure here with you, your host, your advisor, your friend, your pal and your confidant. Thanks so much for being a part of things, as always.

Speaker 2:
And I am Josh Rhett Noble, the attache to the advisor, aka co-host.

Speaker 1:
Yes, the attache is like an attache case. It's a briefcase, isn't it? It's not an attache case. Like an old timey briefcase, I guess. I don't know why it's called that. Yeah, look, I just say things, and sometimes they're right, and sometimes they're not so sure. Why not? Um. Hope you all are having a great day. Uh, thank you so much. As I said, for for being a part of the show. Uh, for full honesty and transparency for the people. I have not had the best day.

Speaker 2:
It's been rough today for Matt.

Speaker 1:
Uh, I had to, like, take a moment and breathe before we started the show. Um, I woke up this morning, and actually, this kind of thing has sort of inspired, um, the next episode that we're gonna do, uh, later, this can be posted later on in the week because we're going to be talking about fraud, because I woke up this morning to the lovely news that my debit card number had been hacked. Um, and I realized this because I went to check my bank account and I'm like, I don't remember buying, um, almost $200 worth of chick fil A gift cards. Um, so yeah, there's something up and then there were other transactions in there. So then I had to call the bank. I had to go to the bank. I had to get a new debit card there. And then to top it off, on the way back from the bank, a rock hit my windshield and cracked it. It's just what I do. You just gotta laugh to keep from crying. Uh, yeah, it's one of those days. Um, but, you know, so anyway.

Speaker 2:
That we hope that your day is going much, much better than Matt's has.

Speaker 1:
Yes. I sincerely hope that that is the case for each and every person watching or listening. Hey, if you're watching on YouTube, like and subscribe, I really would appreciate that. If you are, just listening to the podcast, maybe for the first time. Spread the word about the podcast, share the link, leave us a good rating. I would appreciate it as well. Um, you know, and if you don't like the show, tell your enemies. If you love us, tell your friends. That's about all I got to say about that. You can also go to the website, take pride in retirement.com. A few things you can do there. You can go there for a free consultation. Sign up for a time. You can. There's actually a link that goes right into my calendar. You can see my real time availability. And, um, you know, we'll, we'll go from there and we'll take a deep dive into your financial situation. And, um, so here's the, here's the deal though, with today's show, we're going to focus on financial literacy because April just so happens to be Financial literacy month. And we're going to talk about something that I kind of see all the time when working with clients, and that is this sort of retirement blind spots. Um, and these aren't, you know, necessarily like bad decisions that have been made, but a lot of people are really, they're really actually doing the best that they can with it.

Speaker 1:
But there are certain risks and certain realities for people in retirement that just don't get talked about enough. And so you go into retirement unaware. And if you're part of the LGBTQ plus community, you know, some of these can, can hit a little differently, you know? Yeah. And I like how you're putting that because these aren't things people are ignoring, right? They're things that people may not even know to look for. Right? Exactly. And so today we're going to talk about and walk through a few of these things that are kind of the biggest blind spots and what you can do about them. So let's get into it, huh? Yeah. Well, let's start with something that sounds like a good idea. Living longer, right? Unless you're having a bad day like Matt has today. Sometimes. Sometimes life can be rough. But why is that actually a challenge when it comes to retirement? Living longer? Yeah. No, I mean, it does, um, you know, on the surface, it's like, oh, people are living longer, longer lives, presumably healthier lives as a result. But if you live longer, that means your money is going to last longer, right? So there's the challenge. And retirement can easily last 25, 30 or even, you know, upwards of 40 years. Like you could literally spend as much time retired as you did working. And that is a sort of a new reality for a lot of folks in, in, you know, generations that are now aging into retirement, getting into retirement age.

Speaker 1:
And so that's, you know, decades and decades of income without that paycheck from work that you had been, you know, that you had gotten used to. I guess I should say over the years and decades previously. So and there are also some particular considerations for LGBTQ plus folks. I mean, there's a higher likelihood of being single later in life. Maybe you just have never, you know, partnered with anyone for whatever reason. Maybe you, um, were divorced later, uh, in, in life because of certain life circumstances. They're just in in our community. And this is true. Uh, statistically, I believe, but also, uh, I know it's true just in my own sort of, um, personal experience with folks that a lot of people are single later in life and a lot don't have children to rely on for care or support. So there's a lot that goes into this. If you're aging alone, you've got to make sure you have a plan, right? And you've got to make sure that that plan accounts for housing. It accounts for caregiving, for, um, decision making about your health and well-being later on. All of that becomes critical. And there is a sort of a ripple effect. You know, you throw a stone into a lake and there's ripples that go out. And so there's this ripple effect with this too.

Speaker 1:
Living longer is the stone that you throw. Um, but, but more years really equals more exposure to inflation, more exposure to rising health care costs, more exposure to market risk. Like you just sort of it sort of amplifies the other risks. So yeah, longevity in and of itself is a risk, but it also amplifies because it just, you know, time is money, as they say. Uh, the longer the time period that you have to be around, the more amplified those other risks like market risk, um, you know, inflation risk and all that kind of stuff. Uh, all, all of that is so, I mean, yeah, living longer, it's a blessing, but it raises the bar for your financial plan. So that's kind of the biggest, uh, blind spot that we want to cover here, uh, to begin with. And look, you've got to have a plan that's built to last. I want to give you one if you don't have one, or at least explore that, get a second set of eyes on your situation. Uh, go to take pride in retirement and you can set up a free consultation. It's absolutely free of any cost or any obligation. Uh, go to take pride in retirement.com or you can give me a call 55. 2469211. That's 855246 9211. And I always say Matt is the advisor that cares. So give him a call. Reach out to him because he's someone that has your best interest at heart.

Speaker 1:
And I love, Matt, that you touched on the community that we're a part of the LGBTQ plus considerations for this because not everyone has kids. Some people do, some people do end up single. And it reminds me of that meme where it's like, oh, you don't have kids, who's going to take care of you? And it's like a cat pushing you around in a wheelchair. Um, Matt and I have multiple animals, dogs and cats, but we do have a niece and some other family that maybe could take care of us. But I think that's important to just plan so that you're not panicking. You've got this plan ready because everybody's situation is different. And Matt, that's what he specializes in, is discussing your unique situation. And, um, he is very good at it. Why thank you. Uh, and, and I appreciate that. No, and it's true. I feel like I see that meme. I'm sort of looking into the future, uh, that I Actually our dog Sparky, I feel like is going to be the one taking care of us all because he is. He'll live longer than anybody. He is. I often joke about the fact. I mean, he's 15. He's been through so many, like different health issues and stuff, and he is still kicking and doing all right. But I always joke and say that like in case of nuclear apocalypse, there will be three things left on this planet.

Speaker 1:
It'll be cockroaches, Cher and Sparky, 100%. So maybe he could take her. He's blind and he can barely walk some days. But maybe he could still push us around in a wheelchair. Maybe so. So, speaking of that, we're living longer, right? But what about the cost of that? So I feel like healthcare is one of those things people kind of underestimate, right? Yeah. And it's one of the biggest expenses period for anybody in retirement. And it's often, you know, estimated at $300,000 plus throughout retirement for couples. I mean, I've seen, you know, several different studies over the years. And that's been the case in, in, in many of them. And so, you know, you've got to make sure that you know what is covered, what's not covered in, say, Medicare, for example, you reach age 65, you're eligible for Medicare. And so you may think that, oh, if you have the need for long term care at some point in the future, you've got to go into the nursing home. All the Medicare will take care of that. Actually, it won't maybe short term, like rehabilitation in a nursing home setting. That could be something that could be covered. But long term care, no Medicare, just not going to cover it. So you've got to make sure you know the coverage that you have. Um, you still have premiums, you still have out of pocket costs for certain things.

Speaker 1:
And so you've got to know your Medicare coverage and your Medicare options. Maybe you're on Medicare now and you don't have an idea of, you know, what options might be out there that could be better for you, things like a Medicare supplement or Medicare Advantage plan, that sort of thing can connect you with folks who know the ins and the outs of all of those options, and let you go through those with a fine tooth comb here. See what's best for you. Also for our community, for Lgbtq+ folks, you know, you may not have a built in network of caregivers. Like I said earlier, you might not have kids to take care of you later on in life. Um, there's also, you know, got to be an emphasis on planning for inclusive and affirming care environments. Not everywhere might be the friendliest. Um, and so you've got to just take some, some extra care, some extra caution there. Um, and speaking of that, again, long term care that you're talking about, either kind of the three main ones are in-home care, like where you'll get a, like a visiting nurse or someone who comes by to help with those activities of daily living, either an assisted living facility where you go and, and you stay not a full on nursing home where there's 24 hour nursing care. But you do have care that's there, that's available.

Speaker 1:
And then of course, there's a full on nursing home that people think about. And those costs for all of those can really pile up really, really quickly. So you've got to make sure that you have a plan that accounts for that. And again, Medicare not going to cover it. And, um, yeah, I mean, it gets the older we get, the more the body breaks down, the more likely we are to need health care. So it becomes a lot more than just like a line item in a budget. Um, it's one of the biggest risks to your retirement plan. And so if you haven't planned for healthcare costs, um, yeah, we can help you do that at the, uh, here at the take Pride in Retirement team and active wealth management. We'll be glad to do that for you. Take a look at everything with a fine tooth comb. Uh, go go online rather to take pride in retirement.com take pride in retirement.com is the website. And once again, you can call 855246 9211. Um, but yeah, healthcare, it's a huge one and it's one that that's why it's one of our big blind spots we're talking about here that not a lot of people put enough thought into. I think gets thought about, but maybe not enough thought into it, right? And as Matt mentioned earlier too, if you are listening, please go subscribe on YouTube.

Speaker 1:
It really helps us get the word out. Subscribe. I'm still working on a tune for that. Um, yes. So please follow all the socials and check us out on YouTube. So this one kind of surprised me that taxes don't just go away when you retire. And Social Security isn't as simple as just take it when you can, right? Yeah. I mean, that's the thing. Like a lot of people think, oh, my tax burden is going to be a lot less in my retirement years or, um, I don't really, there aren't really many decisions that go into Social Security and, uh, you know, I just take it at 62 and I'll be fine. Or maybe I'll wait a few years until I'm 65, like whatever. It's, but it's not a whatever type situation, right? So let's kind of run through a couple of different things here. So you talked about taxes first number one, taxes in retirement. I mean, those, uh, money, that money that you have put away in through the years. Like, say in a 401 K or an IRA. You withdraw. You take distributions from those in retirement. Those distributions are taxable. They have never been taxed before because those are pre-tax dollars that went in, especially with the 401 K. That money has never seen the tax man coming up like a hurricane to come in. There's the tax man coming. But he's not coming for those 401 K dollars until you take those out in retirement.

Speaker 1:
So that is something that's going to be taxable. Required minimum distributions. Then hit now at age 73 where Uncle Sam says yeah, I've given you that great tax break all these years. You haven't paid taxes on this money. So at age 73, I'm going to make you have take a withdrawal so that I can get my due. I can get that tax money, um, from that payment eventually that ages working its way up to age 75. But right now it is 73, uh, for folks who are going to be turning that age here soon. So those required minimum distributions. Something to watch out for. They can also push you into a higher tax bracket. Then Social Security plays into this as well, because up to 85% of your Social Security benefits may be taxable depending on how much you make. Um, and that's only one aspect of the Social Security picture. Talk about this all the time. You know that I talk about it in seminars and stuff as well. Um, that there are a bunch of different claiming decisions taking early reduces your benefit permanently. So don't think you're just going to turn 62 and take the money and run. You know, I kind of say sort of the default answer to anybody, like when they ask, when should I claim Social Security? Well, take it when you need it.

Speaker 1:
You know, if you don't need it at 62, then delay that at least until your full retirement age, which, um, you know, for everybody right now is going to be either 66, 66 and some months or age 67 or wait all the way up until age 70, because if you delay out till 70, you're giving yourself an 8% bump in that Social Security amount each year that you do that. There are also some big LGBTQ plus community sort of concerns here with, um, you know, your filing status that, uh, impacts your tax strategy as far as the tax piece. But then there's also for social Security, spousal benefits, survivor benefits. Those are critical for married couples. You've got to make sure those are coordinated when you make those claiming decisions. So there are a couple of different opportunities here. Number one is explore on the tax front a Roth conversion, if that makes sense for you. Um, sure. I'd be glad to run those numbers and see if it does make sense for you. Basically what you do is you take something that's in like an IRA 401 K, that kind of thing that's going to be taxed later on. You pay the taxes on it now as you convert it into a Roth. And then on the Roth side, the growth is tax free and the withdrawals in retirement completely tax free. So you're paying the taxes on a smaller amount now to take a bigger amount later on.

Speaker 1:
That is going to be a tax free amount. So you're really getting an advantage there. And then coordinating withdrawals with your Social Security timing. You've got to make sure that everything is timed out. Um, you know, not perfectly because we're human beings, we make mistakes, but as well as, as humanly possible. Um, and I will say social Security, one of those big decisions. And so it can really have a huge impact, hundreds of thousands of dollars, honestly, uh, for you in your retirement. And I as an RSA, which is registered social security analyst can, uh, you know, meet you where you are, take a look at your situation, your earnings, your, um, you know, estimates from social Security actually run some numbers for you and see when the optimal time is for you to take your social security benefit, uh, start that claiming process. So give me a call 85524692 11 or go to take pride in retirement.com to get that report. Again. It's all absolutely free of any cost or obligation. Love it. All right, so last one. And this feels sort of like the big picture to me. A lot of people focus on how much they've saved but not how they're actually going to use it. Right. So you've saved it. What are you going to do with it? Yeah. Well, this is the thing. You've got to have an income plan.

Speaker 1:
I mean, it really is what it boils down to, like Social Security, which we just talked about, can be part of that income plan. I think, though, a lot of people these days, they focus too much on Social Security being kind of the only source of income, certainly the only source of guaranteed income in their retirement. And so you. Sure. Having that one big number that you've saved up, that's great. That's a wonderful achievement for you, for anybody. But at the same time, you've got to keep in mind that you either have to have a really sort of rigorously planned out income strategy for that, or you need to take that lump sum and turn it into a guaranteed stream of income that is never going to run out as long as you live. For me, I would rather have that guaranteed income source than the one big number, because I trust that guaranteed income source to pay out for the rest of my life. Whereas unless I'm just making sure that I cross every T and dot every I. Um, you know, you could run out of money given the fact that, you know, inflation could run rampant or, you know, there could be another pandemic, God forbid, or whatever could happen. You know, the unknowns out there of the market could drop, um, you know, like we saw in 2008, for example. We could have these big sort of events that could rock things.

Speaker 1:
And so that guaranteed income stream protects what you have and gives you a payout for life on a regular basis. And so that just means a lot of peace of mind there. So yeah, that savings, It's not income. Um, it's that big number. And so a lump sum is not going to create that paycheck. You need to replace that paycheck and take that lump sum and do that. I can walk you through how to do it. Go to take pride in retirement.com reach out for a free consultation. Um, and you can also, um, you know, create yourself. It's basically a personal pension essentially, uh, that's sort of the strategy that I'm talking about here. And, you know, a pension from the workplace used to be the thing. Those have pretty much gone the way of the dinosaur these days. But, um, you know, if you create a personal pension, pretty much the same thing. You take that lump sum and you change it into regular installment payments that are coming to you. So like a paycheck for the rest of your life. Um, also for the LGBTQ plus community, there are some considerations here. Like we have historically less access to pensions or employer benefits like that. And so, you know, maybe there's lost time to make up for as a result of that. But no matter who you are, the risk of not having a plan is far greater than you know.

Speaker 1:
Taking the time to just come up with a plan and sit down with a professional. Sit down with an advisor who can actually make sure that it's a plan that works for you. If you take too much early, that's a big risk of not having a plan, right? Because then you're just draining your savings way early and then you don't have the money maybe later on in retirement when you need it even more. Or if you're being too conservative with your money and you're not enjoying your retirement to the fullest, that's another risk that you run. So, you know, you don't retire on a number, you retire on an income and a strategy for that income. So again, take pride in retirement. Com or 85524692 11. That's the phone number. You know, what stands out to me is that none of these are obvious, yet they all really matter. Yeah, yeah. You know, they're easy things to overlook. They really, really are, because people can get overwhelmed. And trust me, I know this from working with clients. People who get to that retirement age can be overwhelmed and something might get missed, but you want to make sure that you check off all of these boxes. These are the kinds of things that can really quietly reshape your retirement, for better or worse, you know? And so the good news is, once you know about them, which if you've listened to the show, now you, you do.

Speaker 1:
Uh, you can plan for them and I can help you plan for them, uh, and give you that confidence that you need and that you really are going to want going into your retirement years. So if you want help building a plan that takes the blinders off, gets rid of those blind spots for you, um, and is tailored to your life, your goals, no matter who you are, where you come from, who you love, how you identify or how much money you have go to take pride in retirement, take pride in retirement.com or call 85524692 11. And I'd love to help you take that next step. I'm going to give you clarity. I'm going to give you confidence. That is my goal each and every time I meet with someone. And I want to do that for you. So yeah, please reach out. Wonderful. Well, lots of really good information today, Matt. And if I could wish anything to our listeners is to have a better day than you have today. Well, I am better now that I have spent it with you and with our listeners, viewers. But yes, I pray and hope for a better day for each and every person who is watching and or listening. And thank you for being here and keeping me grounded on this crazy, crazy day, I appreciate it.

Speaker 1:
Alrighty. Thanks y'all. Thanks, everybody. Until next time, take pride in yourselves and take care of each other. We'll see you then. Thanks for listening. To Take Pride in Retirement, members of the Lgbtq+ community deserve to work with a fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call 9211 or go online to take pride in retirement. Investment advisory services offered through Brookstone Capital Management LLC. Bcm, a registered investment advisor, BCM and Active Wealth Management Incorporated are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Matt McClure and Active Wealth Management are not affiliated with or endorsed by the Social Security Administration or any other government agency. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not in any way refer to investment advisory products. Rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company, not guaranteed by any bank or the FDIC. Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest, please refer to our firm brochure. The ADV Too-a item for. For additional information.

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