Mastering Retirement: Crafting a Financial Plan That Lasts

Are you making the right moves to secure your financial future?

In this episode, April Schoen delves deep into how to construct a bulletproof retirement framework aimed at ensuring you won't outlive your money.

In this episode, you’ll discover…

• The critical element you might be missing in your retirement spending plan. 

• How to identify potential income gaps before it’s too late.

• The role of regular reviews and adjustments in a dynamic retirement plan.

• Why a retirement rehearsal could be the key to your financial success.

• Actionable steps to define your retirement goals and build a sustainable plan.

Mentioned in this episode:

• https://curryschoenfinancial.com

Transcript:

April Schoen: Hi everyone, I am April Schoen a financial advisor with over a decade of experience in helping guide my clients to and through retirement. I've helped hundreds and hundreds of clients at this point in my career, realize their goals, and overcome their concerns and their challenges when it comes to how do they not only prepare for retirement, but make sure you know, all their i's are dotted, all their T's are crossed, and they're really ready for that next stage of life. 

So welcome to our channel. We are kicking off a five-part series on retirement planning for people over 50 on your path to having that secure future. Excited to share with you guys over these next five episodes. And we're going to be starting today by talking about how do you create that retirement framework. How do you make sure you have a good foundation, and you're set and you're ready to go for whenever it is that you're going to retire? 

So as we're going to be going through this series, we're really looking to address some of those key components, concerns, and questions that you might have about retirement planning. Because here's what I've realized in the last 10 years is that most people have the same questions when it comes to retirement. And these are big decisions that we have to make. And sometimes we're not quite sure how to make those decisions, are we making the right ones? How do we test-drive it and make sure that we're doing the right thing for ourselves and for our families? 

So our goal for this five-part series is really helping you think about those questions. And how do you answer them to make sure that you're ready? So today, we're going to be talking about how to create that retirement framework. Then next episode, we're gonna talk about how do you maximize your retirement income. We're gonna talk about Social Security. 

Navigating Social Security benefits. Because let's be honest, when to take Social Security and structuring how to take Social Security is going to be one of if not the biggest decisions that you're going to make when it comes to your retirement. We're going to talk about investment strategies. What do we need to be thinking about with our investments, when it comes to getting ready to retire? Because it's very different. It's very different when we're in our working years, and we're saving money, and we're taking our income and putting it back on our balance sheet, to now we're stepping off into retirement. These are two totally different aspects to our world. And we have to make sure that we're investing properly for that. 

And then we're also going to talk about how do we restructure that withdrawal plan, because that's also one of the biggest questions I get is okay, April, I'm done all of this. I've saved money in retirement accounts and investments. I know I have Social Security, I might even have a pension. But now what? How do I actually put together this retirement income plan? 

So in today's episode, we're going to be focusing on setting retirement goals, assessing where you are today, and then also how do you create that comprehensive retirement plan. Okay, so again, we're gonna be focusing in on a few key areas here is really setting some goals around retirement, and then looking at our current situation to make sure that we've got a solid foundation to build your retirement plan. And then we're going to talk about understanding what are those steps involved. What do we need to do to start creating that retirement plan? 

So the first step in building this framework is to set some goals around retirement. And the first question that I'm going to talk about here is why set goals for retirement? Why is this even important? Well, I find that this is actually an area that people overlook, that we don't think about it enough. So when I ask questions to clients, like, hey, when do you want to retire? Some people don't know. What are we going to do in retirement? What's retirement going to look like for us? And we don't have answers to those questions. 

So if that's you, the first thing I would say that we do is we set up with let's think about it. Let's think about when do we want to retire. In an ideal world, if you could have it any way you want it? I don't want you to think about the how. That's the one we get hung up on. We get hung up on the how. How am I going to retire? But I want you to think about in an ideal world, when do you want to retire? And then from there, we can think about what do we want retirement to look like. 

So when you've stepped off into retirement, now every day is like Saturday and Sunday. What do you want that to look like? What are you going to do with your time? Do you have travel plans? Are there hobbies that you want to get involved with? Do you want to work on your golf game or pickup pickleball? Or maybe there are some organizations that you want to volunteer with. So I want you to think about what is your retirement going to look like. 

And there are some key things in that. One, I would think about where do I want to live. Am I going to stay in my current house? Am I going to move? Some people may downsize, we may move to be closer to children and grandchildren. So this is all part of what does my ideal retirement look like. And of course, when do I want to retire? I would say for most people what I find to be typical, in my practice, is people are saying, hey, I want to retire at 65. I want to retire at 70. Those are probably the most two common ages that I hear, but that doesn't mean that has to be for you. 

So again, think about when do you want to retire, so that you can build your framework around that. We've got to have a starting point. It might mean that we adjust it. I'm not saying if we say today, you know, hey, I want to retire at 62, that that's the end all be all. And we're gonna write it in stone. But it is helpful. If we have some end date in mind. That we have some time frame. Because we've got to have a way to measure it. 

We've got to have a way to say, okay, here I am today, I'm 52. I'm gonna retire in 10 years when I'm 62. What does that look like for me from an income standpoint? Can I retire at 62? That's gonna be the next question. But we need to start with a timeframe so that we can have something to measure it by. And then when we're thinking about these retirement goals, one of the things that we want to do is we want to create a spending plan. 

Now, I do not like the term budget, I think budget is like a four-letter word. It's actually more like a diet. It's that restrictive diet that we just don't stick to very well. And then we tend to like binge eat afterwards. I think of a budget that way, too. So I don't necessarily want you to create a budget. But I do want you to have a spending plan. I want us to have an idea about what is that income needs and wants gonna look like for us in retirement. And we're going to talk about that a little bit more today. 

And then, of course, you guys have all heard of SMART goals. We want to have when we're setting these goals, we want to make sure that they're specific, that they're measurable, achievable, relevant, and they're time-bound. So thinking about your retirement, it's easy for us to craft some smart goals around that. We know when we want to retire, it's in 10 years. We have a spending plan and a rough idea of a spending plan. So we know what we need. We know where we are today. And then we know if there are any sort of gaps or adjustments that we need to make between now and then.

So this is what we want to think about when we're thinking about these retirement goals. So when do we want to retire? And what do we want our retirement to look like and creating that spending plan for retirement. So once we have that, once we have an idea of what our goals are, what do we want life to look like in the future? The next step is we want to look at where are we today. Because we can really assess and say, okay, here's where we want to be in the future. Here's where we are today. Are those two things in alignment? 

I like asking the question, if we keep doing what we're doing today, for the next 10 or 15 years, are we going to reach our goals? Or are some tweaks needed? I find for a lot of people that we need some tweaks. We need some adjustments. And what's great about once you have this plan is it's easy, then to make those adjustments. Think about if we're on a sailboat and we're sailing in this direction, we're not making big changes once we have our destination set. We're making these small, little minor changes along the way. 

And we want to do the same thing with your retirement plan. We first got to get it crafted and created and get the baseline for it. But then it's really just about making some small adjustments along the way. So how do we start by assessing where you are today? Well, we're going to look at two key areas on your balance sheet. We're first is how to buy your assets. Assets. This is everything you own that hasn't value. Think cash, savings accounts, money markets, investments, real estate, retirement accounts, and personal property. This is everything that you own own is going to comprise your assets. 

So we want to take stock of that. We want to take an inventory, and say, what do we have, as far as assets are concerned? So to get started with that, if you don't have this created somewhere already, what you want to do is you want to gather your financial statements and your documents, and you want to create a comprehensive list of all of your assets, and their current values. 

I encourage you to do this anyway, even if you're not really thinking about retirement yet. Because just so you can know what you have. We got to know what we have today. So we can look at it and see do we need to make any changes. I was just doing this last night actually, for my family. I typically do this on a quarterly basis where I sit down and do an overall update and review about where we are from an assets and liability standpoint. 

So what you're gonna want to do is just grab those account statements, and you may have to log in to a few places, you want to check out how much do I have in checking and savings, money market, and CDs. Do I have any sort of taxable investment accounts? A brokerage account. What does that look like? Do we have retirement accounts through work, or IRAs, or Roth IRAs? So you want to take an inventory of all the assets. 

And then we want to take a look at the other side of the balance sheet, which is the liabilities. So this is what do you owe? So we think what do you own? And what do you owe? So when we think about the liabilities, mortgage, car loans, credit card debt, student loans, and personal debt. And you want to do the same thing here, you want to do an inventory of I want to think of current balances, minimum payments, interest rates, so you can take a look at what do you have. And what's the payoff date? When are these liabilities going to be paid off? 

Because this is going to really help you determine, again, going back to that thinking about creating a spending plan for retirement. If we have debts, we need to know what will be paid off before we retire. So let's do a deep dive of different types of assets. So when we think of assets, now, this isn't a comprehensive list, you're gonna see I'm just kind of keeping it high level here. But we think of cash. So again, checking savings, money market, and CDs. Cash on hand. Any sort of cash equivalent. 

We think of investments. Now when I say investments here, what I'm meaning is non-retirement investment accounts. Nothing that's a 401k through work or an IRA or Roth IRA. These are taxable investments, non-retirement investments. What about retirement accounts? Do we have an employer-sponsored retirement account? And that thing goes by a bunch of different names. It could be a 401k, a 403b, a 457. You've got SIMPLE plans, and lots of different names, but do we have a retirement account? There are IRAs and Roth IRAs. Did you set up an individual retirement account on your own? 

One thing that I find here sometimes for clients is that we've got things in multiple places. That's not necessarily bad. But sometimes it's hard to keep track of right? How do we know exactly what we have? And is it all working for us? I was working with a client recently, and they have multiple Roth IRAs. And they just set them up sporadically over the years, and in fact, one of their Roth IRAs, it wasn't even invested. It was like sitting in cash. So that wasn't their intention. That's not what they wanted to have happen. It's just been that way because we weren't checking up on it. 

So take an inventory of those accounts, see if there are some changes and tweaks that need to be made there. We also have real estate. Primary home, do we have rental properties, vacation home, second homes. What do we have as far as real estate? And then think about retirement, too, for those. Does that mean that we've got liabilities attached to those or we have expenses that are attached to those retirement accounts? Or excuse me, tied to that real estate. So again, thinking about these assets, cash investments, retirement accounts, and real estate? 

If we start thinking about different types of liabilities, well, the most obvious one is your mortgage. And so the question here is, will that mortgage be paid off by the time you retire? Or do we need to work on a plan to have it paid off? I'm not saying you do. I'm just saying we need to investigate that we need to analyze that to see if that's a decision that we need to make. Car loans. Do we have any car loans today? Will we be buying a new car before we retire? We want to make sure that we have plans for that. 

Do we have any credit card debt? And if we do have any credit card debt, how do we put a plan in place to pay that down efficiently and effectively? We think of credit card debt, like that anchor that you pull with you through life. It's not something that we want to carry indefinitely. So if you have credit card debt, it's not necessarily a bad thing to have. But we just want to make sure that we've got a plan for that. And I can tell you, my clients that step up into retirement that have already resolved the credit card debt issue, they're much much happier. Less stress in their lives. 

What about student loans? This may surprise you or may not, but I'm actually seeing more people today who are retiring with student loans. These are people who went back to school, at some point in their career, maybe they had a career change, or they wanted to continue their education to look for a promotion, or some sort of job change. And so they're now we're stepping off into retirement, and we have student loans. Or maybe we were planning to work till 70. But life happened. 

And now we have to retire much earlier than that, that we planned. Because we've had some sort of health issue or something along those lines, or we got to step out of work to take care of a family member. And then now we have these other things in our financial world that we weren't really planning on having that. So I think it's always great for us to have a plan, but we also need to have some exit strategies. And we got to work on the what ifs, the contingent. What if something like that happens, what are we going to do? 

So once we have this inventory of your assets and your liabilities, then we can work on understanding our net worth. So your net worth calculation is pretty simple. Net worth equals total assets, minus your total liabilities. So we think about when we're working, when we're in our working years, our primary goal is we're saving money. We're taking income that we're earning today, and we're turning that into net worth because we're saving it somewhere back on our balance sheet. 

So we take money from our job, and we systematically save it, invest it to build up those assets. And I want you to think of your income while you're working as the fuel for your financial engine. So by saving a portion of your income, and investing it wisely, we're building wealth. That's how we're going to build those retirement accounts, real estate, stocks, bonds. And over the years, these assets, they grow, they compound. And that's really what's growing your net worth over time. And I really think of net worth as being just this snapshot of your financial health. It's really just a picture of all the financial decisions that you've made. 

And when you retire, this focus is going to change. It's going to change from now I'm earning and saving money, to now I'm going to be taking income. I'm going to be withdrawing money from my assets. And so now the opposite happens. Now what we're going to be doing instead of taking our income and converting it to net worth, we're now going to take our net worth and we're going to convert it into income. 

That's really what that retirement plan is, is how do we take all of these assets that we've accumulated over our careers, and how do we now turn that into an income that we can live off of for the rest of our lives? So you know, your net worth, which is again, savings, investments, assets, it's now going to serve as one of the sources for your retirement income, which we're going to get into later in this series. 

And so this might mean we're going to start taking money from retirement accounts. We're receiving dividends from stocks and bonds. Maybe we're getting rental income from properties. Maybe we've got a pension. We're going to have Social Security most likely. So really taking a look at all the pieces to that retirement puzzle, but your net worth is definitely one of them.

So once we have an idea again thinking back, we've looked at and thought about our goals for retirement. So we know when we want to retire, we know what we want retirement to look like. Then we take a look at okay, where are we today? So we know where we're going in the future. And then we know where we are today. And we can do some analysis to see how to create that retirement plan. And, you know, are we on track? Are we going to be able to retire in 10 years or five years, whatever that looks like for you? Or are some tweaks needed? 

So we really want to start by creating a comprehensive retirement plan. And again, we're gonna make tweaks, it's not written in stone, but I always recommend, we've got to have a baseline. We've got to have a starting point. The first thing we want to do, again, is when we're creating this retirement plan is when do we want to retire? So for this analogy, let's just assume that we want to retire in 10 years. That’s our goal. Our goal is setting, we're gonna walk off into retirement 10 years from now. 

So once we have a time in mind about when we're gonna retire, the next thing we want to do is we want to create a spending plan. And what I really recommend that we do is, because this can throw people off, because most people at this stage don't have a budget, they haven't budgeted in quite some time. And honestly, they don't really even know how much they're spending on a day-to-day basis for a lot of people. So we start here. It's not perfect, I don't need it to be perfect. It doesn't have to be like granular down into the details. 

But we just want some idea of what this spending plan needs to be for retirement. So what I would tell you to do is look at your current spending today. Do an analysis. Take a look at your spending habits or the last three to six months. And take a look at those and we want to break those spending habits down into what's essential spending and what's discretionary. What are those basic living expenses that we need to continue living our life? And then what are some more of those discretionary items that make our life feel like our life? 

So we just want to have an idea of what's essential, what's discretionary. And then when you're also looking at this, depending on how far away from retirement, you are, again, you want to ask the question, am I still going to have this need in retirement? So think back if you have some debt. Will the mortgage be paid off? Will the car be paid off? Are there certain things that we have in our world today that we're not going to have in retirement? 

But the opposite is also true? Are there things that we're going to need in retirement that we don't have today? The first thing that comes into my mind is health care. We've got to have a plan for what our healthcare going to look like in retirement. So that's one of the things that you want to think about and consider. So once we have this spending plan, we have a rough idea about what that income is going to look like. We then want to analyze what are our future income sources. 

Let me give you some examples. We want to think about when am I going to take Social Security. Do I have a pension of some sort? And what is that pension going to be? And then looking at our other like investments, and retirement accounts, thinking through and creating that withdrawal plan for how am I going to take money from those accounts? What's the best way to structure that income? So I have the income that I need today to live my lifestyle, but that I also don't run out of money before I run out of time. 

So we want to make sure that we don't outlive our money. And so when we're thinking about looking at these income sources, so we say, okay, great, here's where my income is going to be in retirement, here's my spending plan, then we can see, do we have a gap? Or do we have a surplus? If we have a gap, then we need to go back. And we need to create a savings and investment planning to start bridging the gap. What are the strategies that we could put in place today to start getting those two numbers closer and closer together? 

And we're going to be talking a lot more in detail about creating this retirement plan because it's I say, comprehensive here, but it's complex. I think about a retirement plan. And I think of all the puzzle pieces that you have in your financial world, and how do we put those together and structure it in a way to put you in the best possible position. And so what we want to do is after we look at those income sources, we want to identify are there any income gaps. And if there are, how are we going to develop, change, and tweak our savings and investment strategy? 

So I love it when someone is 10 years out because we've got time. You don't have all the time in the world. But we've got time to make some tweaks and adjustments. We got to start now. But we do have the time to make some changes to get you there. And that's one of my favorite things I love doing with clients is say, okay, great, we want to retire in 10 years, here's where we are today. And what we do with that is we'll do what's called a retirement rehearsal, where we say, based on everything you have in your financial world today, this is about what your income is going to look like in retirement. 

And then we need to ask the question, hey, how does this look? Is this achievable? How does this look from an income standpoint side? And we've got to make sure that we have enough income coming in today, or I say today, but meaning when you first retire, to satisfy that income that you need and want. But we also have to make sure it doesn't stop there. We also have to make sure that you've got more income coming in later. Because we know with inflation, that you're going to need more income tomorrow than you need today. 

So we also have to take that inflation piece into consideration, which we're going to definitely talk more about in this series. But once we really have this retirement plan, again, think about this retirement rehearsal having a baseline, then we want to do some regular reviews and adjustments. This plan does not stagnant. Just because we set it up today doesn't mean it's going to be the same for the next 10 years. We have to meet regularly to review, and make adjustments, how are things? Are we ahead of schedule? Are we behind schedule? And really updating those numbers. 

And I love doing this with clients because we update those retirement rehearsal numbers. I love how we get closer and closer to retirement, that that picture becomes clearer and clearer. And it really helps my clients have more confidence because they know what the income side is going to look like for them. They can see it in black and white. We've done all the analysis, we've done the what if. We've said, what if we retire early? What if we retire later? What if we get sick? What happens when a spouse passes away? We've done the kind of ins and outs and so they know what they need to do now, to put them in a better situation. 

They know what's working, they know what tweaks need to be made. And it really does give them more of that confidence for them to be excited about it, and not stressed and worried about it. And honestly, now they're kind of looking forward to retirement more than they were before. It's pretty neat. So I want to go through and recap what we've discussed so far today. And so to recap, we discussed how do you set some goals and priorities around retirement. We've talked about how do you take an inventory about where you are today, both your assets and your liabilities. And then we talked about creating that comprehensive retirement plan. 

So I want to give you some action steps because I always want you to leave being able to know this is my next best step, this is the thing that I need to do next to move myself forward. First, I want you to take some time and define those retirement goals. Use the framework I talked about earlier with having some smart goals. But go and think about it, define, and prioritize what those retirement goals are going to look like for you. Gather your financial statements. Take an inventory. Grab those statements, grab those documents, and create a detailed list of your assets and liabilities. 

We have a planning software that we use for our clients that helps our clients get organized, stay organized, and it's a great place for them to see everything that they have in their financial world in one place. Okay, so I encourage you to have something similar like that. And then the next thing we want to do is we want to start working on that retirement plan. Think about your goals. Think about your current financial situation. Do that spending plan. Forecast what your income is gonna look like in retirement. So you can know, is there a gap or not? That's a very crucial piece of information for you to know. So again, key action steps, define your retirement goals, take an inventory of where you are today, and then start building that retirement plan.

Now in our next episode coming up, we're going to talk about how do we maximize that retirement income. So again, we're gonna think about having that baseline that first run-through of our retirement rehearsal, and then how do we make it better? How do we maximize the retirement income? So be sure to tune in to our next episode, as we get ready for that. And, you know, as we're thinking through this, as you're thinking through this and you might be saying, hey, I need some help with this. 

Maybe I need some help thinking through and someone to ask you questions so that you can create your retirement goals. Maybe you need help with figuring out assessing, hey, where am I today? I've got things in different places, and I'm not sure how they all work together. Or maybe the idea of creating that retirement plan is very daunting and scary. And you would love to have someone who can help you with that to make sure you're dotting your I's and crossing your T's, and that we're not leaving any stone unturned. 

So if that's you, and you'd like to schedule a time for a complimentary consultation with me or someone on our team, I'd recommend that you go to our website, which is www.curryscheonfinancial.com. And you're going to see a link that's going to say book a call. And you can click that link, it's going to take you right to my calendar, you can schedule, you can click on a 30-minute phone call, and you can pick a time on my calendar that works best for you. 

So again, I'm gonna give you that website that is curryschoenfinancial.com. And what we do in this complimentary call is we're going to talk through again your goals, your concerns, and then we'll be able to give you some tailored advice, where you are today. And what are some of those key action items that you should be working on in building your own retirement plan? And then we'll also discuss more about what we do and how we help clients and if it makes sense for us to work together in some capacity. So as we're wrapping up here today, I just want to say thank you for joining me today. I hope you found this impactful and I look forward to seeing you in the next episode. Bye now.

Voiceover: This material is intended for general public use. By providing this content, Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. If you'd like additional information about our services, you can visit our website at curryschoenfinancial.com, or you can call our office at 850-562-3000. Again, that number is 850-562-3000. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities, Guardian, or North Florida Financial and opinions stated or their own. April and John are registered representatives and financial advisors of Park Avenue Securities LLC. Address 3664 Coolidge Court, Tallahassee, Florida, zipcode 32311. Phone number 850-562-9075. Securities, products, and advisory services offered through Park Avenue Securities, member of FINRA and SIPC. April is a financial representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is a wholly-owned subsidiary of Guardian. North Florida Financial is not an affiliate or subsidiary of Park Avenue Securities or Guardian.

2024-177816 Expires July 2026.

Navigating Social Security: Expert Insights for Retirees

In this episode, April Schoen and John Curry dive deep into one of the crucial components of retirement planning: Social Security. They explore the significance of timing your Social Security benefits and how it impacts lifelong income, offering expert insights into making the most informed decisions.

They’ll cover:

• Why the decision of when to take Social Security is critical and how it affects your and your spouse's financial security throughout retirement

• The implications of early or delayed benefits

• Potential changes to Social Security and common misconceptions about the impact of legislative adjustments on future benefits

• Tailored strategies to maximize your Social Security benefits based on individual circumstances, including considerations for health status, income needs, and marital history

• And more

Mentioned in this episode:

• https://curryschoenfinancial.com

Transcript:

April Schoen: Hello, and welcome. My name is April Schoen, and I am sitting here today with John Curry. 

John Curry: Hello, April. Hello, everyone. 

April: Today we are going to be focusing on one of the puzzle pieces of retirement. And that's going to be social security. So I'm going to give just a few minutes as people kind of get logged on here today. But while we're waiting for that, let's just talk about why is this so important. Well, when you are going to take Social Security is going to be one of the most important decisions you're gonna make when it comes to retirement, if not the most important one. 

Because when to take Social Security is going to impact your income for the rest of your life. And if you're married, it's going to impact your spouse's income. And just think about how some people live 20, 30, 40 years into retirement, it's going to make a big impact. And John and I, when we're meeting with clients every week, right that we choose those days, we are meeting with clients, guess what we're talking about? Social Security. 

John: Every time.

April: Every time. When do you take it? When is the best time for you to take Social Security? All right. So first of all, I just want to say, commend you for joining us today to learn about this topic. I mean, John and I are geeks about this kind of thing. We read and study it. But that's because we love it. But not everybody does. 

So good for you for taking the time to be here to understand kind of what your options are. And if you're here and you want to know, what are my options? What are those kinds of 

different claiming strategies? What should I be thinking about when it comes to retirement? 

If you want to make sure you're kind of saving time, and you're getting the most out of your benefits? Or maybe you're even worried about Social Security, and you're wondering is it gonna be there when I retire? If you've got some of those questions, I'm glad you're here. Because those are the things that we're going to be talking about today.

John: Stay with us, because we're gonna talk about some of the issues and give us some feedback on what we think ultimately, will have to happen. Assuming that the knuckleheads in Congress can team up and do stuff together. 

April: That's right. That's right. 

John: That's a technical word, by the way. Knuckleheads.

April: Knuckleheads. I like it. So let me just tell you just a little bit about us. Who we are, what we do, and how do we help people as we get started into this today. So John and I typically work with people who are getting ready to retire. Many of them are members of the Florida Retirement System. We're located here in Tallahassee, Florida. So our largest employer here in Tallahassee is the state of Florida. But we work with clients all over the state, as well as all over the country. We've got clients, I think, in 15 or 16 different states. 

John: I think it's 16.

April: I forget the number, but somewhere in that ballpark. And when we're meeting with clients, what we find is sometimes they struggle, or they're a little frustrated, they're anxious about what is this going to look like for them in retirement. Because for many of them, they spent their entire careers devoted to their careers, devoted to their family. And they haven't had the time to devote to the finance part of it. To understand what all those options are like we do. 

They want to make sure that they're making the right decisions for their future, but they may not know how to get started. So what we do is we help them understand a lot in a short amount of time, so that they can make better decisions and can feel confident about what they're doing. So they can know their money is working for them and that they're going to be on track. Especially when it comes to retirement.

John: I think the biggest thing we bring to the table is clarity. Because you can read everything about Social Security, go to the website, buy a book, and it's still confusing. It's confusing to financial professionals. I've had the experience of going to a security office or making a call talking to two different people and getting two different answers. So if we can cut through all of the stuff, and just identify the things that are appropriate for that particular person, we can save you a lot of time. And time is money.

April: That's right. That's right. And so today we're gonna talk about how do you secure your retirement so that you can maximize your Social Security benefits. And what we're going to talk about is those different payment scenarios and you're going to know exactly how this applies to you. Because here's the thing, there are a lot of choices. 

Do you take Social Security at 62 when you're first eligible to take it? Do you take it at your full retirement age? Do you take it at age 70? Add in a spouse's income and it complicates the issue. There's also a lot of information out there. How do you sift through all that to figure out how that applies to you? And many of our clients, what they don't want to do is they don't want to make a big mistake. 

Because I always say there are no do-overs. Sometimes we make these decisions, and we may not be able to undo them. So we want to make sure that we're making the right choices. And that we're also not leaving any money on the table. Last year, let's see, it was in June of last year. So if you're seeing the screen, these are my two boys, they're seven and 10. And last year, we flew out to Arizona for a trip and this was their first flight. 

So as you can imagine, they were both a little bit nervous. And I thought it was really interesting kind of experiencing this trip, this flight with the boys when it was their first time. Especially if it's something that you've done before. Because if you've traveled, if you've flown by plane, then you know what it's like to go through security. You know how it feels when the plane is taking off. You even know how to navigate the bathroom situation on a plane. 

But for them, it was like this brand-new experience. So we were prepared. We talked about it. We watched YouTube videos on it, we packed our bags, and I felt like we were as ready as we could be. We got to the airport super early. And I booked that first flight out of Tallahassee to make sure we weren't going to be late. 

So here we are on the plane, we're getting ready to take off. But the plane doesn't go anywhere. And we're on the tarmac and we're waiting and we're waiting and my boys have no clue. They're they're just playing their games. They're so excited about their first flight. They're kind of getting a little like when are we going to take off? When are we going to take off? And we're waiting, and waiting, and waiting. And it turns out there was a paperwork issue of all things. Paperwork. 

So here we are sitting for probably 30 minutes because there was some sort of paperwork issue. So what happened with this is it delayed our flight taking off, it delayed our flight to Atlanta. So by the time we got there, we had five minutes to get to the next gate. And so for me, I'm over here having like a mini heart attack. I'm wondering, are we going to make our connection? 

Am I gonna have to rebook flights? It’s me and the boys, it's just me traveling with them. So are we going to be able to sit together? There was just a lot of anxiety. So we get off the plane. And I tell them, they all had backpacks. And you can see in the picture, I'm like, give me your backpacks because we're about to run. And boy we just took off. 

We ran, ran, ran ran ran. I was making sure the little one was, was staying up with us. And we literally got to our gate, we're like the last few people on the plane. So they were fine. They had no idea all of this anxiety was happening. But me on the other hand, I was having a little mini heart attack. And what made me think about this was when we have these moments of uncertainty, we realize how important it is to be resilient, to be adaptable, and to be prepared. 

And I think about those kinds of same things when we're trying to get ready for retirement. Just like we had to adjust our plans and roll with the punches, we got to be ready to face those unexpected challenges. We got to make decisions about our future, even if we don't, maybe we don't even have all the answers yet. 

And so despite kind of having some of those, we made our flight, everything worked out well. But you know what was interesting, too, like I said, the boys didn't feel any of this stress. They thought it was super exciting and fun. And that's because they had someone who had been through this before who was their guide and could help them. 

So like just like our flight last summer, this journey into retirement can be filled with those same unexpected delays. You can have paperwork issues. And there can be a level of uncertainty. But if you're prepared, if you're adaptable, if you've got a guide, someone who can help you through that, it's going to make all the difference in making sure you've got a smooth transition.

John: So are you telling all of us that if we get in trouble, just call you and you'll get us on the plane?

April: I'll try my best. No promises.

John: Hard enough to get yourself on the plane. Much less two little kids.

April: Yes, yes, yes. Always an adventure. So here's what we're going to talk about today. We're going to talk about how does Social Security work. We're going to go through those key components of your benefits. And then we're also going to talk about some different payment scenarios. And we're going to save some time at the end. 

So we could talk about how you can customize all of this for you. Because we're going to try to get as much information to you in the time we have left. We're not going to be able to get all the information out of my head and all the information out of John's head, but we are going to try to get you as much information as possible. 

So let's get into this and talk about how does Social Security actually work. We get a lot of questions about this. About just the mechanics of it. But we want to get through this and then get to those claiming strategies. So how does social security work? Well, it's been around since 1935. I almost said '85. 1935. And as of December 2023, the average monthly benefit is $1,905. 

And definitely, there have been some changes to Social Security through the years, but the basis of how it works is relatively the same. There's a Social Security trust fund. And that is primarily funded through the taxation of wages by the current workforce. And then those funds are used to pay out current beneficiaries. 

So now we're going to talk about this a little bit later about what are some of the issues with the program, but this is one of them. We’ve got current workers paying current beneficiaries. So let me give you some numbers. Back in 1945, there were about 40 workers to every one beneficiary. And now Social Security estimates that by 2035, there's going to be two workers to every one beneficiary. 

So you can see how this change, how having more beneficiaries and less, especially that ratio to workers, how that's going to put more pressure on the system. So we're going to talk about that a little bit later. But that is definitely one of the issues that Social Security faces.

John: By the way, the last major overhaul to Social Security was in the 1980s. And we're way overdue to have some more, and we'll get into some of the issues. We'll touch on some of that. But that might be why you were thinking 1985 there for a moment. Because that's when most of the major stuff hit the fan. It was in 1983 when they started it. Under Reagan.

April: Well, how do you qualify for Social Security? You have to earn what's called credits. And essentially, if you've got 10 years of work history, then both you and your spouse qualify for Social Security and Medicare. So again, as long as you've got about 10 years of work history, you and your spouse both qualify for Social Security and Medicare. 

And then Social Security is going to determine what your Social Security benefit amount will be by averaging your highest 35 years of work history. And what they do is they take, you know what we made 35 years ago, and they index that into current values, current today's prices, where they take your highest 35 years of salary. 

So if you don't have 35 years of work history, they put zeros in there to fill in the gaps. So if you don't have 35 years of work history, it brings down your average. One thing you can do is you can log into Social Security's website, you can look at your statement, and you can see your earnings history online, and see how many years you've thought, and see how that is calculated. 

And speaking of statements, if you've never been on Social Security's website, I highly, highly encourage you to go on, you can go to ssa.gov or socialsecurity.gov, you can create a login and there you can pull your Social Security statement. The Social Security website also has lots of calculators that you can use, but we don't recommend you use the calculators, you're going to want to get your actual statement. 

Because that statement is going to show you lots of different things. It's going to show you what would your benefit be at 62. At your full retirement age and age 70. And then it's also going to show any sort of survivor benefits that are available to spouses and children. So let's go through and talk about the different components of Social Security and what you need to know about how it works. 

The first thing to know is there is something called your full retirement age or FRA. And your full retirement age determines when do you get your full benefit. 100% of your benefit. There are no increases or decreases to it. It's your full benefit. And your full benefit is determined by the year you were born. So if you were born between 1943 and 1954, your full retirement age is 66. If you're born in 1960 and later your full retirement is age 67. 

And anywhere in between there, you might have some different full retirement ages. 66 and two months, 66 and eight months, etc. Now you can claim Social Security as early as 62. But if you do that your benefit is going to be reduced, and it's going to be reduced forever. So some people think I take it at 62. And then when I hit full retirement age, I'm now going to get 100% of my benefit. And that's not accurate.

John: I was telling a friend this morning about our webinar in the gym. I said there are some things you should know. He said I only want to know one thing? When do I get my money? When do I get my money?

April: When do I get my money? I like that, I like that. Well, you can get it when he's 62. There are some pros and cons to that. But you can claim it at 62.

John: You want to talk about some of that now or later?

April: We'll talk about that next because we'll get into looking at 62 and age 70.

John: Because I want to share what I decided to do because you and I have been through that a lot with other people.

April: Yes. Now you can also delay taking Social Security. You can wait past retirement age. And when you wait, your Social Security benefit is going to go up. So the longer you wait, the higher your benefit will be. But that increase stops at age 70. So there's no reason to wait past age 70 to start Social Security. 

So when we think about Social Security, we think of it in three phases. What is it at 62? What is it at my full retirement age? And then what is it at age 70? So let's look at an example. Now we're assuming this person's full retirement age was age 66. Okay, age 66. And currently, in 2024, the maximum monthly benefit at your full retirement age is $3,822. 3822. 

If you take it early, if you took it as early as age 62, you're gonna get a reduced benefit. And they're going to pay you 75% of what your benefit would have been at your full retirement age. And then if you wait, if you wait past your full retirement age, you get what's called delayed retirement credits. 

And your benefit increases at 8% per year. So if my full retirement age is 66, I wait to age 70. At four years, my benefit is now 132%, it's going to be $4873. Now, your delayed retirement credits is also going to depend on your full retirement age. Because if your full retirement is age 66, you have four years for that benefit to grow at 8%. 

But if you're like me, my full retirement age is 67, I'm only going to have three years for that benefit to grow until age 70. The thing I want to point out here too, is what happens if you decide to take it somewhere between 62 and your full retirement age. Social Security calculates it down to the months. 

So how many months either before or after your full retirement age. So if I decided to take it at 64, it's not going to be 75% of my benefit. It's going to be between that 75 and 100%. And if you've got questions about that, about, hey, I'm thinking about taking it at this specific age, what's my benefit going to be? We can help you with those calculations. 

We can also help you look and decide what's what we call a crossover point, and at what point would be the best time for you to take it. I'd love to tell you that there's like a one-size-fits-all answer here. But there's not. It is going to depend on everybody's individual situation.

John: However, a lot of people are being told there's a one-size-fits-all all and everybody should do X, or everybody should do Y. And it's just not accurate. Not if you do proper planning.

April: That's right. And we see both ends of the spectrum. We hear from other people how everybody should take it at 62. They should take it as early as possible. We hear no, you shouldn't take in at 62. You should wait all the way to 70. And I think for us again, it's not a one-size-fits-all all. It's we need to look at your individual situation to decide when is going to be best. 

Because you can't make this decision in a vacuum. You can't just look at these numbers and say yep, that's what I'm gonna do. You have to look at the full picture. I said at the beginning, Social Security is just part of the puzzle. It's just one piece of the retirement puzzle, and it's got to fit in with everything else. 

So let's talk about these delayed retirement credits and we'll kind of go through this. Like I said before, how long you have to defer or delay if you're choosing to do that is going to be based on when is your full retirement age. And every year you wait they increase your benefit by 8%. But they also look at it on a per-month basis. 

So you don't have to wait one full year. You could wait eight months, you could wait two years and six months, and Social Security is going to calculate what that increase would be. But they do the same thing. If you take it early, it's month by month. So when you look at your statement, again, this is why I do recommend that you get a copy of your statement, because it's going to show you your personal amounts. 

It's going to show you the earliest age of 62. It'll show you what is your full retirement age, and then also age 70. And as we mentioned, there is no perfect retirement age that covers everyone. This decision to delay or to not delay, to take it early, is going to be considered on this personal situation, your circumstances. So John, let's talk about for a few minutes here, what are some of those key considerations people should think about if they're going to take their benefits early, or if they're gonna wait?

John: Well, to me, one of the biggest things, because I've been doing this for 49 years is people taking the benefit too soon. I still hear people say, well, the system's gonna go belly up. Start taking it at 62. Get your money out fast. But then you see people who do that, and then upon their death, the spouse gets a lot less money. And for people who have very little life insurance in place, they should delay as long as possible to have a survivor benefit that's larger. We've seen that many times in working with clients.

April: Especially the higher income earner.

John: Absolutely. So I look at that, then I look at in my case, I chose to take my benefit at full retirement age of 66. Got my first check 2019, January '19. Because I looked at the time value of money, I didn't want to wait until 70. Yes, it would have been more money, as you saw earlier. Over $1000. But I have to take into account the time value of money. What could I do with that money in those four years. 

Some of it went into life insurance, to give a benefit later to children and grandchildren and now great-grandchildren. Some of that I used to take care of things I wanted to do along the way. But basically, most of it got saved. You know, for me, I put it in my life insurance, because I can get the money back if I need it or want it. 

But, upon my death and Social Security goes away, there's money there to replace it. So I think from a standpoint of being realistic is do you need a higher benefit, because maybe you couldn't qualify for insurance or maybe you don't have enough assets to leave the same income to your spouse. 

So think in terms of survivor benefits. And then just think in terms of just of when do you want the money? You die, you and I have had this conversation hundreds of times with people. And most people, most people are truly better off taking it at full retirement age, if they've done a good job of planning in other areas.

April: That's right. That's right. You know, one of the things we'll talk about too is your income while continuing to work. So if someone's thinking about taking their benefit early, one of the key questions they should ask is, are they still going to be working? Are they going to have some earned income? Because if they are, they may find that they've got a reduction from Social Security.

John: They're going to see that coming up a couple of visuals here too.

April: So definitely if we're thinking about taking it early, we may want to say, well wait. Before I do that, am I going to have some sort of earned income? We also want to take into consideration our health. You know, I'm thinking about one of our clients who was having some major health issues decided to go ahead and take it. He had to retire early. 

So he would have had took his benefit at 62. You know, and I think that was a very good decision for him. Especially considering those health issues. Go ahead and get that money in now and use it to enjoy life while you can. But I'm thinking about another couple, one of the couples that we work with where we did a little bit of both. The husband was the higher-income earner. 

And so we recommend he wait to his full retirement age. But his wife was a few years older, she started her benefit early. So that way, they kind of got the best of both worlds. They got some income coming in now from Social Security and then were able to wait to his full retirement age to start taking his. And it just kind of worked out to be that sweet spot between the two.

John: Well it goes back to what you said earlier, April. It's not a one size fits all. People think it is because okay, say universal plan, if you have your 10 years of working the 40 credits, if you qualify, so people think ok, it's just pick A, B, or C. It's not that simple.

April: And you know another one of our clients was retiring but we recommended he wait to take his is one of the situations where we did. And that's because he had some deferred compensation that was going to be coming in so he had some big bonuses that we're going to be coming in to him. 

And we said, well, you're going to have these bonuses coming in, it doesn't make sense for you to take Social Security, because most of that is going to the IRS. Why don't we wait, let it continue to grow, and then take it when your income is not so high. So just a few examples there. But that goes back to how it comes down to that personal situation, everyone is so different, right, about when to take it. 

Now, Social Security does have a cost of living adjustment or a COLA, but it's not guaranteed every year. So what they do with the cost of living adjustment, this COLA, is it's based on the CPI, the Consumer Price Index, for urban wage earners and clerical workers. And so this year in 2024, the COLA was 3.2%. Last year, in 2023, the COLA was 8.7. One of the largest that we've seen, and that's because inflation had been so high in 2022. 

But I do want to point out, there's been several years where we've had no cost of living adjustment. Back in 2011, back in 2016. And we've even had some years where it's very, very small. So while yes, there is a cost of living adjustment, it's not guaranteed, you will find in our planning, when we're first doing what we call is a retirement rehearsal, we assume no cost of living adjustment on Social Security. 

Because I'd rather be more conservative about it, and then have some of these cost of living adjustments be icing on the cake than us planning on it being there. This is one of the things that I hope they change. I hope they change how the cost of living adjustment is calculated. Because this CPI, the one for urban wage earners and clerical workers, isn't a great representative of the population that's taking Social Security. So that is one of the things that I do hope that they change.

John: I think you will see that change. I don't know when, but I think the reasonable people sitting around the table talking about what needs to be done like they did back in the 80s, then you'll see changes. You will not see it this year because of an election year. Let me be clear about that one.

April: Now, let's talk about how is your benefit taxed. Because we get this question a lot. There's a lot of confusion here. Some people believe that Social Security isn't taxed at all. 

John: Because at one time it wasn't 

April: That's right. But now it is. So part of your benefit is going to be considered taxable income. And Social Security has this complicated formula where they say what is your, they call your combined income. And how you figure out your combined income is you take your adjusted gross income, you add back in non-taxable interest, and you add in half of your Social Security benefit. 

And this is how you get your combined income. And then if your combined income falls between different levels, this is gonna decide if 50% of your benefit is considered taxable income, if 85% is considered taxable income, or there are some people where they don't get taxed. So I'm going to walk through this, but I'm here this isn't where I would say if you guys have specific questions about this, let's look at your situation. 

Take it offline and look at your specific situation. But what they do on the tax is they look at your combined income if you're an individual or if you file jointly. And then if your combined income falls between different categories. Let me give you an example for maybe a couple filing a joint income. If their combined income is somewhere between $32,000 and $44,000 then half of their benefits are considered taxable income. 

But if their income is greater than $44,000, then 85% is considered taxable income. So good news is not all of your Social Security benefit is taxable, but part of it most likely will be. And while John and I are not CPAs and tax attorneys, we look at it and study this enough that we can kind of help guide you on where you're going to fall out in these different ranges. 

We had a client a few years ago who started her Social Security, and she didn't know that she could have taxes withheld from her benefit. So she got penalized from the IRS because she wasn't having enough taxes withheld. That is one of the things I want to make sure that point out too is that you can have Social Security withhold your taxes when you start. Now let's talk about what happens if you are continuing to work in some capacity in your Social Security benefit. So what we're going to be talking about here is earned income. 

So this is wages. This is I'm working, I'm either working for someone or I'm self-employed, I've got some sort of earned income coming in. This does not apply if you've got a pension, this does not apply to any income from investments or retirement accounts. But Social Security, if you decide to take your benefit before your full retirement age and you're still working, then your benefit will be reduced, depending on how much you're making and when you start to take your benefit. 

So let me give you some examples. This is for 2024. If you start taking your benefit at 62, and you've got earned income over $22,230, then Social Security is going to reduce your benefit $1 for every $2 above that limit. So in half, right? It's going to reduce it $1 for every $2 above that limit. 

That's why we say we have to be very careful when we're taking it early if you plan to work in some sort of capacity. How much is that income going to be? We've got some clients that want to do something in retirement, and they just make sure their income is less than $20,000. They're working part-time, they're working in some sort of consulting position. Just earning some play money, as we call it.

John: We met with some folks yesterday, where over the years the consulting he did, he said, okay, now cutting it off right here. Because of that.

April: That's right. And then Social Security does differentiate between the year you turn your full retirement age, and the month you turn your full retirement age. Let me give you an example. My birthday is in December. So in the year that I turned full retirement age, if I have earned income over $59,520, then Social Security is going to reduce my benefits $1 for every $3 over that limit. 

So for me, that would be if I started Social Security earlier in the year, and my birthday is in December, so I don't hit my full retirement age until December. But if I went ahead and started taking Social Security in February or March, I might have a reduction due to this income limit. But if I wait to start Social Security in the month that I turn my full retirement age, for the month of your birthday, or the month that you turn that age, depending on if you've got one of the 66 and 10 months, birthdays, full retirement ages, then Social Security doesn't care how much you make. 

You can make a million dollars a year and still collect your benefit with no reduction, no earnings limit. So not only does it matter about how much income you're earning, but it matters when you start that benefit. Very important. So now let's go in and look at some different payment scenarios. And what does this look like about when to take your benefit? 

The first thing we're going to talk about is spousal benefits, because as we said, after you've got about 10 years of work history, you and your spouse qualify. So what the Social Security Administration is going to do is they're going to look at your spouse's benefit record, and they're going to base it off of his or her history. 

And let's walk through how these spousal benefits work. So a spousal benefit, you're entitled to half of your spouse's benefit. Let me give you some examples. Let's say that my Social Security, I'll just make the math easy, let's just say that my Social Security benefit is $1,000 per month. My husband would be eligible to receive his benefit, or the spousal benefit, whichever is higher. 

So if my benefit is $1,000 a month, he's eligible to receive $500 a month as the spousal benefit, or his. Whichever is higher. And you'll find this in documentation and letters from Social Security that how they do the spousal benefit is they pay you your benefit first, and they add on enough of it to reach that 50% mark. There are also benefits for widows and widowers. 

So there are widow and widower benefits available for you and your spouse. So if you're the surviving spouse, you are eligible to receive 100% of the highest benefit. You won't receive both, but it's 100% of the highest benefit. So again, let's just use an example. Let's say my husband's benefit is $2000 a month. My benefit is $1000 a month and Brian passed away first, I would be eligible to receive his benefit at the $2000 a month, but mine would go away. 

And this is really when we want to do some planning. Because we know especially when there's a couple, a married couple, we know at some point, you're going to have a reduction in your retirement income, because the lower of the two Social Security's is going to go away at some point. So we've got to have a way to replace that.

John: Let's be more direct. That some point is when death occurs. And that's why the coordination of Social Security, investment assets, savings assets, and life insurance is critical. Sadly, most people don't think about that. They don't think about, okay, when I die, my Social Security benefit could go away for my spouse, and then there's a gap.

April: And we don't have time to get into this today. But the other thing that happens there too, is your taxes change. And when you go from filing married to filing single, guess what happens? 

John: Higher tax bracket. 

April: Higher tax bracket. I think that's one of the most terrible things about our tax system, our tax code, is that you've got a spouse who passes away and now you have to pay more in tax. And as we just see here now I have lost some income, but I got to pay more tax. Awful. So again, that's when it comes down to planning. You have to plan for these things because we know it's going to happen. There are different survivor benefits. 

Again, I'm not going to take the time to go through this today. But just know you can take it at your full retirement age, you may be able to take it as early in the survivor benefits as early as 60. But it's going to depend if you're continuing to work in some capacity. There are also benefits for divorced spouses. 

So if you're divorced, but you were married for 10 years or longer, there's a benefit available to ex-spouses who may have had that lower earnings record. So they have to wait until they're at least 62. And they have to remain unmarried. But it works exactly the same. They're eligible for those spousal benefits. 

They're eligible for up to 50% of their ex-spouse’s benefit. And what I want to point out here too, is that the benefit paid to an ex-spouse does not in any way affect how much goes to the spouse, or even if they remarried. So I've heard kind of thrown around sometimes when people are getting divorced, if you don't do this, I'm going to prevent you from getting my Social Security benefit. And guess what, they can't do that. 

John: You can't stop it.

April: You can't stop it. They have no control over the Social Security benefit. But again, it doesn't impact them at all. They can still get their benefit. If they're married, again, their new spouse can get the spousal benefit, and you can get the spousal benefit.

John: So in theory, you could be married for 10 years and one day three different times, right?

April: That's exactly it. And multiple people can collect under your benefit. Now, I don't think that's what Social Security originally intended that to do or be. But that is one of the problems.

John: I'm still shocked, that that has not been changed. I believe that's one of the things that will be heavily looked at, and will probably go away in the future. Maybe not, but it is something worthy of consideration. To protect the plan.

April: I do want to point out some planning strategies here, if that does apply to you, or you've got a divorced spouse, or some survivor benefits, that there is some planning strategies and techniques that we can apply, or we choose to take one of those, and then let the other benefit continue to grow. So what we may see, I'll kind of give you some examples here, I'm gonna go back to thinking about that survivor benefit. 

Sometimes what we find that works best is you actually take the survivor benefit, and you're getting that income, and then you let your benefit continue to grow to age 70. And now you're able to benefit from those delayed retirement credits. That's a very common strategy that we look at. 

So it's important that we look at it in multiple ways to make sure that we're taking advantage of all of those benefits that are available to you. So let's get into and talk a little bit about some of the issues around the program. And one of the issues we talked about earlier is that we're going to have this ratio of workers to beneficiaries is shrinking over time. So we've got more beneficiaries than workers, especially if we think back to 1945 when we had about 40 workers for each beneficiary. 

And now the Social Security Administration estimates that by 2035, we're going to have about two workers for every beneficiary. And if you go on the Social Security's website you can read their Annual Trust Fund report, and they don't hide it. They are very upfront, they are very clear that if no changes are made between now and 2034, the trust fund will be exhausted.

John: It's also pointed out very clearly on the statement and on the website when you calculate your benefit. So we can't, we can't say they're hiding it from us because they're not.

April: They are not. And let's talk about what they say will happen. So if no changes are made to Social Security between now and 2034, that's 10 years, Social Security estimates, they're going to be able to pay about 76 cents for every dollar of scheduled benefits. 

So I want you to imagine, you're in retirement, you're collecting Social Security, and then your benefit is reduced by 25%. So now, that's not what we want, right? We don't want to have less income in retirement, we want to have more income in retirement. We don't want to have to have less of a lifestyle, we want to have more.

John: So think of it this way. You go to work, and you get your check, and you got to 25% cut while working even, you're not gonna be happy with that. Now you've retired. And maybe you're not able to go back and get another job because of health issues or because you've been out so long that nobody wants you, because you don't have the skill set anymore, which we see a lot. 

And now that 25% happens. That's why it's so important to understand that when Social Security was started, President Roosevelt made it very clear, it's not designed to be the only thing you have to take care of you to retirement. It is a way to keep people secure, and came about because of the Great Depression. And you've got to do your part, save, invest, and plan.

April: I mean, life expectancy is so different today than it was back then. We're living much longer. Social Security didn't intend and plan for us to live as long as we are today. 

John: They had no way of knowing. 

April: They had no way of knowing. So it is definitely one of the issues around the program. So let's talk about what are some of those proposed changes that we might see that are going to help offset this. Well, one of the things that we might see is higher taxes. 

John: Excuse me. Did you say, might? 

April: Might, might. One of the ways we might see some changes is higher taxes. That's one way to solve some of the solvency issue is to have more revenue coming into the program. Have more money coming into the trust fund.

John: The way that they're going to do that, they're not going to call them taxes. There going to be called contributions. So your contribution level instead of 7.2 is going to be increased. It's coming. It's one of the big things that happened in the 80s. So probably what will happen, they'll go back and look at what the committee did in the 80s. And say okay, what can we do that's similar because we have a track record. We can have less political confusion over it. And taxes in some form will have to go up.

April: Yeah, they can increase the actual tax rate, they can increase the amount of money that the taxes are applied to. Because right now there is an income limit. At some point you stop if your income is over a certain threshold, you stop paying into Social Security and Medicare on those. Especially Social Security. So that's one of the things they can do too where it doesn't look like a higher tax, but it is. It's getting more revenue into the system.

John: A lot of people think that's what will happen because Medicare, they did away with that cap. So the logical choice would be to say, well, we didn't raise tax rates, is to raise that income limit or take it off.

April: Absolutely. And have it be unlimited. One of the other things they may do. Oh ok, go for it.

John: They could reduce the benefits across the board. And they could say no more 62. And by the way, full retirement age sorry, April, it's not 67 anymore. It's now 70. So those are all things that have been talked about by Congress in committees and considered.

April: Well, you saw what happened with France. They did that they had tons of pushback.

John: Did you see it? Remember all the riots?

April: Yeah, definitely some pushback. But they did raise that, we're going to call it our full retirement age. But they did raise that. So that's an option too is to raise that full retirement age. Now, one thing I will say is that if you are closer to retirement. You're within that, let's think maybe even two to five-year range. I don't think that you'll have very many changes to your benefits. It's what they're gonna do is they'll impact the younger generations. So I just turned 40 in December. So I think that I will have sweeping changes to Social Security.

John: In the early 2000s, when Congress took this up and then tabled it. They were saying that if you were within 10 years you would not be impacted. And somebody that said, even if you're 55 and older, but who the heck knows, because there're so many moving parts nowadays, April. And you know, you've made a comment we're geeks about this. I read this stuff, and I pay attention to what's happening on the political side. What's happening on the financial side, because it's tied together.

April: Absolutely. Well, think back to 2015, they did make sweeping changes to Social Security in 2015, as well, and they moved fast. 

John: It was done in a matter of a couple of months.

April: Yeah, it was so fast. Some changes that they made then. So you bring up a great point that again, and we think about this, the issues around the program, that Social Security is subject to political agenda.

John: I can tell you this, if I had control over it, a long time ago, there'd be no age 62 benefit. That's when we started getting in trouble with it. And you go back and read and study what the trustees have had to say, that should never have been allowed. If you want some type of hardship provision, that's one thing. But across the board to say, you can take, quote, early retirement, that never should have been allowed.

April: Yeah, so we're gonna see, especially this year too with it being a presidential election year, I think we're going to hear a lot about Social Security in the news. So it definitely becomes that political football and gets tossed around for sure. Now, there's another issue with the program. But this is, excuse me, what I should say is, this isn't necessarily an issue with the Social Security program. 

It's more that it could be an issue with your retirement. Now, Social Security was never meant to be your sole income in retirement. And this is some information that the Social Security website that they publish. So this data comes back to 2019. And we're looking at people who are retiring at the age of 25. 

And Social Security did this study, to say, hey, in these different kinds of pre-retirement income levels, how much of that income will be replaced by Social Security? And how much needs to come from other sources? So let me give you some examples. We're going to look at this kind of middle-income tier here. So they looked at people who were making pre-retirement about $86,000 a year. 

And they said that Social Security is going to replace about 32% of your pre-retirement income. And that remaining amount has got to come from other sources. So what are some options? What are some examples of other sources of where to have this come from? It could be you get a pension, right? Do you have a pension? 

That's one of the first questions we want to ask, What about retirement accounts, investments, savings, real estate? You've got to make sure that you've got enough income coming in to satisfy your income for the rest of your life. And not just income today, but make sure that you've got increasing income later. 

This goes back to us looking at this, we call it a retirement rehearsal, where we play what if. We throw on the table all of your puzzle pieces. All of the pieces of your financial life. And we say how do we put this together in the best way possible? So what does that mean for you? When do you take Social Security? 

If you have a pension, how is that going to fit into your overall income in retirement? What about investments and retirement accounts? What about taxes? What about costs for health care? These are all these things that we got to take into consideration to make sure you got income today, but you also have more income later.

John: Very important. Especially all the discussion about inflation right now. The Fed Chairman just this week said not likely to get to 2% and that we should get comfortable and get used to inflation. His words. It's not transitory after all.

April: It's not. No, it is not. I think 2% was too low of a number myself anyway, but it is sticking around here. That's for sure.

John: I remember back when I bought a house in 1982. If people listening to this, right today, some of the people are old enough to remember this. Mortgage rates were 13% when I bought that house. Inflation, depending on who you listen to was over 16 to 17%. Money market funds were paying 16% back then. 

And my concern is that we may see that again. We saw inflation coming down. And I hope the numbers are real. So I hope this continues to come down. But we all should plan for higher inflation to be safe. I'd much rather assume a higher inflation rate and it not happen, then to assume no inflation rates or very small, and then my money is wiped out.

April: Inflation, we call it that silent thief. But sometimes it's not so silent.

John: True. Well, when the income taxes come out, that's screaming. That's not silent at all. Inflation is definitely a silent thief.

April: So today, we've kind of gone through and talked about Social Security, how it works. We've talked about these different payment scenarios. What are some of the issues around the program that you need to be aware of, and then, again, maybe not necessarily issues with the program, but issues and make sure that you're looking at for your own retirement. 

So then the question for you then is going to be how do you put all of this together to figure out what is going to be best for you. And that is an area in which we can help you. Because we recommend that you don't just do this in a vacuum, that you're not just making these decisions on your own without having some professional advice. 

Because you don't want to make a big mistake, you don't want to have some sort of tax issue. So what we recommend for those on the call today is just schedule a time for us to have a discovery call. These are 30-minute calls, where we go through and we're going to talk about and get some clarity about what are your goals. What are your concerns? 

Especially when it comes to retirement. We're going to talk about what are some of the opportunities that may be available to you? And then what's holding you back? What are some roadblocks that might be in your way? And then what are the specific steps that you need to take to save you time, money, and energy. 

And I don't know if we're the right fit for you, because we're not the right fit for everyone. But I can tell you that at the end of this 30-minute call, we will know if it makes sense for us to continue working together in some capacity. So this call is really for you if you're motivated, you're committed to reaching your goals, you're coachable, and willing to be open-minded and learn some new things. Hey, but this call is not really for you if you're not coachable, you're not really willing to learn some new ideas. 

So the best way, the easiest way to schedule a call is you can go to our website, johnhcurry.com/call. And you will be able to be redirected to the calendar link so that you can book that 30-minute phone call. You can also call our office at 850-562-3000. You can let Luke or Leslie know that you are on the webinar and you'd like to schedule your complimentary 30-minute call. 

There's no cost for the call. We get that question, but there's no cost for that whatsoever. So again, the best way to schedule your call is to go to our website or call our office at 850-562-3000. We want to say again, commend you for being on the call today and learning about Social Security. Sometimes it can be a complicated topic, but we try to make it as simple and easy to understand as possible.

John: I want to end this by making this comment. I commend them for listening and getting the information. Knowledge is power. So we're told. But that's not totally accurate. The use and acting on knowledge is power. So take advantage of that 30-minute call or come sit down with us, and have a cup of coffee. And let's see if we can help you.

April: Thank you guys. Have a good afternoon. 

John: Goodbye.

April: Bye now.

Voiceover: The Social Security Administration has not approved, endorsed, or authorized this presentation. There is no charge to attend this event and there are no charges for subsequent consultations. Contact the Social Security Administration for complete details regarding eligibility for benefits. This material is intended for general public use. By providing this content, Park Avenue Securities, LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. If you'd like additional information about our services, you can visit our website at curryschoenfinancial.com or you can call our office at 850-562-3000. Again, that number is 850-562-3000. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with, or endorsed by, Park Avenue Securities, Guardian, or North Florida Financial and opinion stated or their own. April and John are registered representatives and financial advisors of Park Avenue Securities, LLC. Address 3664 Coolidge Court, Tallahassee, Florida, zipcode 32311. Phone number 850-562-9075. Securities, products, and advisory services offered through Park Avenue Securities, member of FINRA and SIPC. April is a financial representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is a wholly-owned subsidiary of Guardian. North Florida Financial is not an affiliate or subsidiary of Park Avenue Securities or Guardian. 

2024-172250. Expires May 2026.

Using Life Insurance for Financial Security

Welcome to another episode of "Ask April" on The Secure Retirement podcast. Today's episode is essential for anyone with questions about life insurance, its benefits beyond death benefits, and its role in ensuring financial security for you and your family. We'll be discussing real-life applications of life insurance at different stages of life, demystifying term and permanent life insurance, and exploring how to tailor life insurance to fit your current life stage.

We’ll cover:

• Understanding the crucial role of life insurance in financial planning and how it fits into your overall strategy.

• How real clients have used life insurance to secure their financial future, protect their families, and plan for retirement.

• The difference between term and permanent life insurance.

• Strategies for tailoring life insurance to meet your unique needs and circumstances throughout different phases of life.

• Insights on using life insurance to enhance retirement planning, spend down assets wisely, and ensure a lasting legacy.

• And more

Mentioned in this episode:

• https://curryschoenfinancial.com

Transcript:

April Schoen: Hello, and welcome to The Secure Retirement podcast, where we unravel the complexities of financial planning and getting ready to retire. Hello, I am April Schoen and today is going to be another episode of Ask April, where we dive deep into some of the most common questions we get from clients. And today, we're gonna be diving deep into the subject of life insurance. 

Now, I know I know, it's not the most fun subject to talk about. But it is essential that we do discuss this. And I did a webinar a few weeks ago on life insurance, the essential tool that everyone loves to hate. And I thought it'd be good to take some of the key items I discussed in the webinar that was almost an hour long, and condense it down for the podcast. 

So this talk is going to be really for you. If you've got some questions about life insurance, how it works, where does it fit in with your overall plan? Maybe you've heard, there's some ways that can help you, not just your beneficiaries, and you're curious about that. And maybe you just want to make sure that you've got a secure financial future, that your family is secure financially, and that you're really on the right track. 

So if that's you, then you're in the right place, because we're going to be kind of covering all of those questions today. And I'm gonna go through and talk about some case studies. Some real life applications. I'm going to talk about how life insurance fits in as a financial tool. And then how do you also tailor life insurance to fit you where you are at your current life stage. 

So as we get into this, I want to first just give you some examples of some clients that I've worked with over the years, and show you how they've used life insurance as part of their overall plan. So the first thing I want to talk about is someone who was a young professional, who used life insurance for debt protection. 

So one of my clients, I'm going to call her Emma, is 30 years old, and she's married and they have one child on the way. And she was pregnant when I first met them. She's a nurse practitioner, she's got a great career ahead of her, but she's really focused on paying off her student loans, because she does have quite a bit of student loans from college. 

So she wants to make sure those get paid off. She also wants to make sure that she's saving for her own kids' college fund, because she doesn't want them to go through the same things that she went through. And she wants to be able to save for retirement. So Emma chose a term life insurance policy with a death benefit that covers her debts, but also provides a financial safety net for her husband, so that if something happened to her tomorrow, her income would be replaced. 

Now, Emma likes the affordability that the term life insurance provides her, knowing that her debts won't be a burden to her family, and that her family is taken care of if anything should happen to her. Now, what about a couple in their mid career and how they use both term and permanent life insurance. 

So Julie and David are married with two kids who are going to be heading off to college in the next 10 years. And they opt for both a term policy and a whole life policy. The term policy gives them protection that they need now, while their kids are still young, and they're not out of college. They still have some debt they need to manage like a mortgage and car loans. 

But they also choose to have a whole life policy because of the stability and the growing cash value. And this cash value becomes a cornerstone of David's financial plan. It offers them a tax advantaged way to save for future college expenses, and potentially supplement their retirement down the road. Now, what about someone who may be single, right? I get this question a lot. Hey, I'm not married. I don't have any children. And so therefore, there's no reason for me to have life insurance. 

Well, one of my clients Sophia has really used life insurance to provide her independence in her later years. Sophia is a graphic designer. She's got a wonderful career. She's very active socially. But you know, as someone who's single, no children, she's always been proactive about her financial security. She knows as she gets older, she may need some additional personal and health related assistance and she wants to make sure that she can afford quality support without compromising her savings. 

And she doesn't want to have to rely on relatives or friends for support. So recognizing some of these risks, she decides to look into a permanent life insurance policy with some additional benefits that provide her extended personal care services should she ever need them. And here's how she's benefited from this decision. First, she's got the cash value. So Sofia's policy builds cash value over time, which she can tap into if she needs it for emergencies, significant expenses, maybe even to just enjoy some in retirement. 

And she likes the tax advantage growth of the cash value, because she sees it as a resource she can utilize without depleting her other investments and retirement accounts. She has an additional rider in her policy that allows her to access part of the death benefit for covered care services, which could be you know, including home health care. 

So this gives her confidence that she's got a plan that she knows she's going to be taken care of in the future. And while she doesn't have any direct heirs, Sophia is passionate about several causes. So she wanted to make sure that her life insurance, this death benefit that comes in tax free to whoever she's named as a beneficiary, she wants to make sure that her legacy continues through the work she values. 

And Sophia values her independence almost more than anything. So this really gives her control over her future health care needs. She rests easier knowing she won't be a financial burden to her loved ones, and can maintain her dignity and choices later in life. Now what about someone who is really close to retirement or already in retirement? 

Well, one of my clients, Linda, she's 67. And she's a retired teacher. And she's been enjoying retirement for the last several years with her husband. They've got a comfortable nest egg. But they are concerned about what if they outlive their savings. So Linda has a permanent life insurance policy. And she used this cash value as a backstop, in case she needs to access it for income or liquidity. 

The death benefit allows her to spend more of her assets and investments in her retirement accounts than she would if she didn't have the policy. This is because she knows the day she dies, this death benefit is going to come in tax free to the family to replace that asset. So her and her husband can enjoy their current lifestyle without as much as a worry about expenses. 

She takes comfort in knowing that her life insurance will help her leave a legacy and provide for final expenses. So this takes the burden off of her family and supporting her wish to leave money behind to her kids and even her favorite charity as well. So thinking about this life insurance, I wanted to give you just several different cases of clients and where they've seen life insurance fit in with their overall plan at different stages of their life. 

As we get into this today, there's really two types of insurance that we need to discuss. And that's term and permanent. And I really think about these as being two ends of a spectrum. Term is really designed for temporary coverage. And permanent offers more lifetime coverage with additional benefits. So term insurance provides coverage for a specific time period. That could be 10 years, 20 years, 30 years. It's a really cost effective solution for temporary deeds like think income replacement, debt coverage. The premiums are typically lower, they increase at age or at renewal, and there's no cash value, so there's no equity inside this policy.

On the other hand, when we think about permanent insurance, this provides coverage for life, as long as premiums are paid. It includes a savings component called cash value that grows tax deferred. You can borrow or withdraw the cash value. And while initially the premiums are higher than term life insurance, it can be more cost effective to you in the long run due to the cash value build up. 

So as I said, as this cash value grows inside their permanent policy, you can have access to it during your lifetime. So let's say you need to pay for a medical procedure. Maybe you want to renovate a home. Maybe you're a business owner and you need to float payroll. Buy a car, buy a house. It can also help with liquidity in a down market. 

So, one of my clients several years ago was getting some major dental work done. And when I say major, it was like a little over $10,000, in dental work done. And when we got together to discuss where he was going to tap into to cover these expenses, we actually looked at his life insurance. And he took a withdrawal from his life insurance policy to cover the expenses. 

Another one of my clients, they were doing a renovation on their home, they were remodeling their kitchen. The husband and wife, they both have permanent life insurance policies. And they both decided to do a loan. So what they did is they took a loan from each of their policies. So when they did the loan, there's no tax impact to them for doing that. They took care of the renovations, and then they paid themselves back over time. It's a great use of this asset. It's really flexible. 

So you could use it to pay for college expenses, business opportunities, major purchases. And also it can provide liquidity in a down market. So what do I mean by that? Well, let's think back to 2022, when the S&P 500 is down 20%, and bonds are down 10. Where everyone was saying there's no place to hide in the market. That wasn't necessarily true, there were avenues. And so we had clients who were planning to take money out of the market at that time. 

And instead what they did is they took either a loan or withdrawal from their life insurance policy, and used that for whatever was they needed it for to allow their investments to come back up. And then we put the money back in the policy. Very, very common strategy for us to look at. So you can really use that cash value as a financial tool. Because that cash value grows tax deferred, it's not subject to market fluctuations. 

It's protected from lawsuits and creditors in Florida. Now, this is state specific, so you want to make sure you pay attention to what state you're in. Again, you can withdraw or borrow against it. And you have the potential to use the cash value or dividends to pay policy premiums later in life. Now, dividends are not guaranteed. Some whole life policies can earn dividends. Again, they're not guaranteed, but they're used to increase cash value and the death benefit. 

You can reinvest these dividends, and that grows tax deferred. And it really helps offer some additional financial flexibility. Now what about using life insurance to enhance retirement planning? Because I get this question a lot. Maybe you've heard, hey, once you get to retirement, you're not going to need life insurance anymore. Well, you might not need it, but you may want it. Let's talk about how it can help your retirement. 

Having life insurance can help you maximize retirement benefits like pension options. It allows you to take the higher pension option, if you have enough life insurance to help replace it. It can also allow you to spend other assets you know will be replaced. So you can spend down investment accounts, you can spend down retirement accounts because you know that bucket is going to be refilled tax free upon your passing. 

You can use the cash value to supplement retirement income. And it can provide a buffer to retirement savings, allowing you to be more efficient in your investments and can also provide that liquidity in a down market. Now if we compare the difference between term and permanent insurance, think about it this way. Term is temporary, has lower costs and no cash value. While permanent life insurance offers lifetime coverage, has an initial higher cost but also has cash value benefits. 

And really when you're deciding between these two types of insurance, think of term for more short term goals and then permanent for more long term planning. So personally, I have both. I have term insurance to protect my family. Because if something happens to me tomorrow, I want to make sure there's enough insurance to help my family stay financially the same .I don't want anything financially to change for them. 

So that's why I have the term insurance that I do. But guess what? I don't plan on dying tomorrow. I plan on living a very, very long time and that's why I have the permanent policies I do more for wealth building and cash value. And so thinking about this as like the long term planning, again, you really want to tailor the life insurance to what stage of life that you're in. 

Because life insurance needs do change and they evolve. Again, if we're thinking about someone who's younger, we may want to focus on those affordable coverage to cover debts and income replacement. And then we want to consider family protection, children's education and wealth building as we're in that midpoint in our career. And as we approach retirement, we really want to focus on legacy liquidity and maximizing retirement income. 

There's a lot of things that you can utilize this one tool for. It just depends on what you're trying to accomplish, and what your goals are, and also the other aspects of your financial world. Because if you don't have insurance, your assets become your insurance. Let me say that, again, if you don't have insurance, your assets become your insurance. 

So life insurance is not a one size fits all. You really want to tailor it to your individual goals and circumstances. And you really want to review this regularly to make sure your coverage aligns with your current life situation. It's not something that you want to just set and never think about again. And that's where a financial advisor can come in to help you navigate these options and create that comprehensive plan that really thinks about all aspects of life. 

So when we think about tailoring this life insurance into every stage of life, I want to give you a few more examples. So I want to think about one of our clients, his name's Alex, and he's 25. And early on in his career, he's got student loans, he's renting an apartment. And so he really wanted to start with an affordable plan that would cover his debts, so they didn't fall on his family. 

And that's really where that term life insurance policy came into place for him. And then as we maybe get a little older, we get married, we have some kids, then we want to really start to think about, hey, if something happened to one of us, can the other manage the mortgage and the living expenses on their own? Again, this is where term insurance comes in. But you may also decide to add a permanent policy. 

That way, you can start on building wealth outside the market, and have some tax advantaged growth and lower expenses. And then as we're kind of approaching that midpoint in our lives and in our careers, people are starting to really see how that cash value is growing. And we realize, yes, this is a protection vehicle. But it's also a savings tool for us, and a future financial resource for our children. 

And then as we're kind of getting closer to that retirement age, maybe our kids are in college, and we're really focused on retirement savings. And at this point, for most of my clients, maybe their term insurance has expired at this point. And so they're really looking for that permanent policy to be that cornerstone for them. It offers them that stable asset that complements their retirement funds, plus their death benefit. 

And then as we're into retirement, having a policy allows them to spend more of their other assets like retirement accounts and investments. It allows them to maximize pension options, because they know that there's an asset that will refill those buckets when they have passed. They protect both of them in this case, as husband and wife, if we think about it that way. And we know that their legacy wishes are covered. 

And of course earlier I told you about my client, Sophia, who's not married, doesn't have any children and to where she saw this like really fitting in with her overall plan. But really, understanding life insurance is just the beginning. The real value comes from applying these insights to your unique situation. Because every individual, every family has different goals, needs and dreams. And this is really where that personalized advice makes all the difference. 

So if you're wondering how you integrate this into your financial plan, or maybe you even have specific questions about your existing policy, I want you to know that we're here to help. So today in this podcast, we talked about some specific strategies. Maybe you're thinking well, I already have some life insurance, and that's great and wonderful. And I would also encourage you to really make sure that we review exactly what you have, because there's a bunch of different types of insurance. And some of them all don't work the same way. 

So it's important for us to really understand what you got, how it's working, and to know if any tweaks are needed. So if you've got some questions, again, maybe about something you already have, or are wondering how this fits in, I'd encourage you to schedule a time to book a call. That way we can discuss what are your goals? What are your concerns? What opportunities are available to you? What roadblocks are in the way? And that way we can figure out if one of these strategies is appropriate for you. 

So the best way to schedule a call would be to go to our website, and we're going to link it in the show notes. But it's curryscheonfinancial.com. And then right there at the top right hand side, you're gonna see a button that's gonna say schedule a call. So you click on that. And that's going to give you a link to our calendar, so that you can book a 30 minute phone call with me. 

So again, that website is curryschoenfinancial.com. That's our website where you can see all of our podcasts. And you'll see at the top right hand side, there's a button for schedule a call. Just click on that, and then you'll be able to select a 30 minute phone call with me right on my calendar. 

I hope you guys found today's episode useful, impactful. If you guys have a question that you're like, oh, I really hope April, you know covers a podcast episode about this, well send me a message. Send me an email or drop us a note through the website. And we'd be happy to cover that in a future podcast. Thanks again and talk to you guys soon.

Voiceover: Whole life insurance is intended to provide death benefit protection for an individual's entire life. With payment of the required guaranteed premiums, you will receive a guaranteed death benefit and guaranteed cash values inside the policy. Guarantees are based on the claims hangability of the issuing insurance company. Dividends are not guaranteed and are declared annually by the issuing insurance company's board of directors. Any loans or withdrawals reduce the policy's death benefits and cash values and affect the policy's dividends and guarantees. Whole life insurance should be considered for its long term value. Early cash value accumulation and early payment of dividends depend upon policy type and or policy design, and cash value accumulation is offset by insurance and company expenses. Consult with your guardian representative and refer to your whole life insurance illustration for more information about your particular whole life insurance policy.

This material is intended for general public use. By providing this content, Park Avenue Securities, LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation or to otherwise act in a fiduciary capacity. If you'd like additional information about our services, you can visit our website at curryschoenfinancial.com, or you can call our office at 850-562-3000. Again, that number is 850-562-3000. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with, or endorsed by Park Avenue Securities, Guardian or North Florida Financial, and opinions stated are their own. April and John are registered representatives and financial advisors of Park Avenue Securities, LLC. Address 3664 Coolidge Court, Tallahassee, Florida, zip code 32311. Phone number 850-562-9075. Securities, products, and advisory services offered through Park Avenue Securities, member of FINRA and SIPC. April is a financial representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is a wholly owned subsidiary of Guardian. North Florida Financial is not an affiliate or subsidiary of Park Avenue Securities or Guardian.

2024-171647. Expires May 2026.

Avoiding the 5 Financial Risks in Retirement

In this episode, April and John dive into the critical financial risks that individuals face as they approach or navigate through retirement, and share valuable strategies to avoid these pitfalls and enjoy a secure retirement.

Listen to learn:

• The top five financial risks individuals face in retirement

• The problem with traditional retirement planning methods

• Effective strategies to mitigate risks associated with market volatility, inflation, taxes, healthcare costs, and longevity

• How to build a balanced financial structure

• And more

Mentioned in this episode:

• https://curryschoenfinancial.com

Transcript

April Schoen: Hello, and good afternoon. Welcome. So glad you're here. My name is April Schoen and I'm sitting here today with John Curry.

John Curry: Hello, April. Hello everyone.

April: And today we're going to be talking about the five financial risks that you're going to face in retirement and how do you avoid those. Now today, we're going to be focused in on five financial risks, but know that there are more, but we're gonna talk about the top five today. And so first, I just want to acknowledge you for being here today. Because it's so important that you do take time to get ready for this next phase of your life. Or maybe you're already in retirement. 

You're like, hey April, I'm already here, but I still have these same risks, how do I navigate those? But it's just important that you're taking the time. So I just want to acknowledge you for doing that today. And this talk that we're going to be going through today is ideal for anyone who plans to retire one day, that could be that you're close to retirement. And like I said, maybe you are already retired. 

So it doesn't matter what stage of life you're in right now, no matter if you aren't where you'd like to be financially at this point, maybe you're not quite sure where to start. Or even if you think you've got everything just the way you need it to be. Because the questions that I would ask would be, how many of you would want to retire with less stress? How many of you would like to not have to worry about money, and to have that time, freedom, that money freedom to go and enjoy all the things that you want to do at this stage in your life. 

Because if that's you, that's great, that's exactly what we're going to be talking about today. And that starts with addressing these critical financial risks that we have in our lives and trying to eliminate them and reduce them as much as possible. So as we get started into this today, let me just tell you a little bit about us and who we are, and how we help clients. So John and I, we typically help people get ready to retire. We're based in Tallahassee, Florida, so many of our clients are members of the Florida Retirement System. 

But we work with people in the private sector as well. And what we find is that sometimes clients when they first meet us, they may struggle a little bit because they've been just so busy with their careers and their family, that they haven't had the time that they'd like to devote to their finances. So they feel frustrated, they feel anxious. Especially as they get closer to retirement, because they want to make sure that they're making the right decisions for their future, but they don't know how to get started. 

So what we do is we help them understand a lot in a short amount of time, so that they can make better decisions, they can feel confident about what they're doing. And the end result is that they have systems in place. And they're confident that their money is actually working for them and that they're on track to reach their goals.

John: Absolutely. And I think the most powerful thing is to get clarity on what they're trying to accomplish. Simplify, simplify, simplify. And most people make things too complicated. Too many moving parts. So I would say the value we bring to the table, is number one getting clarity on where you are, what you're trying to accomplish, and then determine a game plan to get you there and then take action.

April: Absolutely. You know, I was just thinking of one of my clients, one of our clients, John. Janet, who when we first met with her, she was 57. And she never thought that she was going to be able to retire. We were asking her, you know, do you plan to retire? What's your plan around that? And she said, oh, no, I'll never be able to retire. And that was like a keyword. It's not that she didn't want to, it's that she felt like she wasn't able to retire. 

So when we kind of dug in a little bit and said, well, what if we could show you a way to do that? Like, would you like to see that? Would you like to be able to retire one day? And she was like, oh, yeah, I'd love that. And we were able to help put a plan in place for her. Now that said she was 57. She knew she was a little behind on getting started. So we were able to put a plan in place for her to retire at 70. And what's interesting, and this was several years ago when we first met with her, but she's ahead. 

She's ahead of schedule. And I love seeing that. So here's a plan we put in place, and she was happy with it. And here we are a few years later and being able to review that again and say hey, where are we at with this? Wow, you are doing better than you had thought you were originally gonna do. And now you're ahead of schedule.

John: I can tell you, in 49 years of doing this, we've had a lot of those conversations. It's fun to be able to show someone you either are on track, better than you thought, or you're ahead of schedule.

April: That's right. And Janet was like, you know, I could have never done this without you guys. And I said that's very, very nice of you to say that. But really, we just showed you how to do it. You had to take the action.

John: We just talked about that a few minutes ago.

April: That's right. We did.

John: Same thing. We can coach and guide. But the bottom line is you the client have to take action in order to make it happen. We can coach and we can guide, but we can't do it for you.

April: Yeah. And she's a great example of looking at, what do we want in the future. And where are we today, trying to figure out those two things are in alignment are some changes needed. And for her, we did have to put some changes in place. But I think she's also a great example of what's possible as well. So today, as we're going through this, we're going to be talking about some key items. We're going to talk about why traditional planning doesn't work for retirement. 

We're gonna go over the five financial risks in retirement, and how do you avoid them. And then we're also going to go through some questions for you to ask yourself so that you can be prepared for retirement. Now, that can be for someone who hasn't retired yet, or maybe you're already there. But these are some great questions for you to review as you're thinking about this next phase of your life. 

And this is why this is so important because the decisions you make will determine your destiny. I'm gonna say that again. The decisions you make will determine your destiny. And most people make these decisions based on feelings. And what we want you to do is we want you to make these decisions based on facts. Based on knowing all your options. Being able to evaluate what's best for you, so you can make the best decision. 

And that's how it will guide you. Now, John has been helping clients for 49 years, almost 50. And I've been helping clients for 14 years. So in this time we have today we're not going to be able to get all the information out of my head and all the information out of John's head. We're going to try to give you as much information as we can to make this impactful for you. But if it's okay, we're going to save some time at the end so we can talk about how we can customize this for you. But don't stop listening. 

Okay, we got some good stuff we're going to go through today. But we will save some time at the end to talk about how to customize this for you. So as we get into this, we're gonna start with talking about this first piece, which is why traditional planning doesn't work when it comes to retirement. 

Now, the first thing you may be asking is, well April, what is the traditional plan for that? What would we say would be something that would be considered this traditional approach to retirement? And as we go through this, I say this is a traditional approach to retirement, it's probably the most common, but it's definitely not the one that gives you the best options or gives you this optimal approach to retirement. It doesn't give you the best outcome. 

And you may have heard of this rule before, it's sometimes called the 4% rule, or the safe withdrawal rate. So we're gonna get into what that means. And there's a lot that we've learned about this plan, this traditional approach, and what happens with it, and why it does not cause a good outcome for people.

John: May I give you my explanation of the traditional approach? It's simply this. How much money do you think you need in retirement? And then the advisor looks at what you've got and projects to the future, some interest rate. And if there's not enough, they simply put a higher interest rate. Well, we maybe we can get 10 or 12%. So the traditional approach has been to tell me what you need, what you want. And the truth is very few people know what they need and want. It's like me going to a doctor, and I got my arms crossed. 

Hey, doc. Figure out what I've got. I'm sick but I'm not going to tell you what it is. Figure it out. And the approach we take is totally different. It's what do you have? How do we make it better? And reduce risk as much as possible? And that is definitely not the traditional approach. More and more people are taking risks that are totally, totally unnecessary.

April: That's right. Yeah. And this traditional approach to retirement planning, like as you're getting closer and saying, like, what's my retirement income going to be? It really involves saving as much as you can into some type of usually a retirement account like a 401k or could be deferred comp or a 403b and then when you retire, you're going to take out a small amount from your retirement accounts like a fixed rate. And at this point, you're hoping that you don't run out of money. 

But that's where that 4% rule, or sometimes it's called an interest-only strategy. The idea is that you've got this money invested, and you're going to pull 4% out of that portfolio, right? That's the idea behind it. But what happens with this strategy is, it actually causes you to have less income. Think about that for a second. If you have a million dollars, and you take out 4%, that's 40,000. That doesn't always feel like a lot compared to what you have.

John: And that's gross before tax.

April: Before tax. So it causes less income. It causes you to have more taxes, because every dollar that comes out is always taxable. You cannot escape the tax man with this strategy. It's impossible to do. We were just talking some clients this morning. And every time we got to talking it's, what's the tax gonna be? What's the tax gonna be? And so it's a very real concern that we talk about all the time, is taxes.

John: And the example this morning, you just mentioned, our dear friends of many, many years, almost 40 years, he is guilty of allowing the tax tail to wag the economic dog. And once he realized that the taxes were not that big of an issue, he was more receptive to the strategies. But he's always been that way. He's always been worried about I don't want to pay taxes. I pay too much in taxes.

April: That's right. But there are things you can do right to mitigate. Sometimes we're kind of stuck. But if we do good planning, there are things that we can do about the taxes. This strategy causes you to have more risks because you're always at the mercy of the market. You have to always be invested, you can't not be invested. And if you think about the stock market the last few years, okay, and especially thinking about 2022, when you had the stock market down 20%, and bonds down over 10. This is a recipe for disaster.

John: Nowhere to hide that year.

April: Nowhere to hide. That's right. And this also means that you have less liquidity. So I'm going to take a minute and talk this through. Because every dollar that you have allocated to create income for you. Now, it's not liquid for other things in your life. So what if you want to take that trip? What if you want, I was talking to someone earlier, and she wants to remodel her kitchen. What if you wanted to do a remodel or you just have general repairs that need to be done? 

So the issue with this approach is that you don't actually have access to those things when you need it. So let's explore why this doesn't work. Why this traditional approach doesn't work. And that's because this traditional approach, I get it, it's kind of pretty easy to do. But what it fails to realize is that there's a difference between saving money and spending money. We now don't have the benefit of 30 or 40 years in our future. 

We have one year, right? We gotta have income every single year in retirement. And we have to realize that it's a different plan when we're spending money than when we were working and we're saving money. So we have to treat it differently. So let's talk about the differences of those between distributing wealth or spending money and accumulating wealth and saving money. What's the difference between these two things? They're very similar, right? And we're going to talk about these risks today. 

Realize that there are all these financial risks that we actually have present during both phases of our life. While we're working and when we're in retirement. But these risks, they affect us differently. And we have to approach them differently. So I want you to, I want to use this analogy. And you'll see in a minute, but I want you to imagine, I want you to think about climbing up and down a mountain and how these are similar activities, but they're very different. 

So I want you to think about gravity, and how in this analogy of climbing up and down a mountain. Gravity's always present, right, it's always there. But how you react to it, and how you deal with it is going to be different. So if you've ever fallen going up a hill, okay, or fallen going down a hill, you know what I'm talking about? Gravity impacts you in two different ways. 

I also want you to think about Mount Everest for a minute. The majority of actual injuries and fatalities occur on the descent from Mount Everest, not the climb. It's when they're going down the mountain that there's the most fatalities. So when we think about retirement, and so instead of these forces of nature, like gravity, we have economic forces to contend with. And these are those financial risks that we're gonna go through. 

And as we go through them, I think you're gonna see one that you've lived through these before. And so you've lived through these already. And you're going to see how they're going to be relevant to you in retirement. So let's kind of get into talking about the difference between when we're saving money, and then when we're spending money.

John: Let me address something real quick here. In 2000, 24 years ago, June 2000, I went to the Boy Scout Ranch. In Philmont. And it was a 12-day hike, 85 miles. So I hired a trainer to help me get prepared. We spent more time on coming down than going up. He said, most people they focus on gotta climb this mountain. But how do you get down? Because we had a lot of hills. It was mountains. 

And we spent time working on specific exercises, April, to make sure that I had sort of muscles developed, carrying a 50 to 60-pound backpack. And I had no problems. I had people half my age at the time who were having trouble because they focused on climbing, but not coming down that thing. It's not just in the world of physical life, that it applies to the financial side.

April: Oh, absolutely. Absolutely.

John: Physical and fiscal. 

April: Yeah, I like that. So let's talk about one of the first risks that we call mortality. But really, this is the risk of dying. Okay. And so when we're working, this risk is what if I die too soon?

John: Whenever I die it's too soon. What are you talking about?

April: This is true, this is true. I agree with that. But when you're working, you think about what will happen to my family. So I'm gonna give you an example. I'm 40. I'm married, I have two boys that are seven and 10. So if something happened to me tomorrow, I want to make sure that my family is taken care of financially. And I've done that through the planning that I've done. But I want you to see how this changes in retirement. 

Because when we step off into retirement, we're not worried about dying too soon, we're worried about living too long. Okay, what will that do to my financial resources? Will I outlive my money? How will my health be if I live a very long time? So do you see how it's the same risk, but it impacts us differently? And here's the thing. I hope all of you live a very, very long time in retirement and have a beautiful, beautiful life, as healthy as you can be. 

That's what we hope for. But we have to plan for those things. But you know, is the same risk, but it just impacts us in two totally different ways. So let's think about what happens if you got sick or hurt. Think of an illness or an injury. Well, in my working years, the concern is what happens to my paycheck, right? If I get sick or hurt tomorrow and can't come into work, what's going to happen to my paycheck? 

What's going to happen to my income, am I still going to be able to pay my bills? But in retirement, this threat isn't what happens to my income. It's what happens if you have a high cost of care? What happens to your assets? Because your assets tend to be the thing that protects you from that. 

So what are we doing to make sure that you're not going to have an issue there? We've got to have a plan down the mountain to address that risk of what happens if you get sick or hurt. Now these two risks affect us on a one-on-one basis, right? It's very individual. John's mortality and my mortality, your mortality, the risk of us getting sick or hurt are very, they're very individualized.

John: Let me say one thing. Mortality is guaranteed to be 100%. 

April: Correct.

John: You are going to die. Only question mark is when and how will you be prepared for it. In different ways. Financially, spiritually, whatever.

April: Now, there are some other risks that are broader, that are more economic in nature. So the first thing we're going to talk about here is market volatility. Now market volatility while you're working, it actually is your friend. And it actually helps you, because when we have market volatility and you're saving money, you're putting money into the stock market, it actually can help you have a better rate of return. 

But this same thing that helps you while you're saving money in your working years, hurts you in retirement because you have what's called the sequence of return risk. It only takes a few down years in the market when you're taking money out for it to start this downward spiral. Let me explain what I mean by this. If you're taking money out of your accounts, and the stock market is down, now your account has to work even harder to get back to where it was us. 

Because when you take money out, now you've locked in those losses and what's left in that account has to work even harder just to get back to where it was not even just accounting for what you took out, took out that account. And so this is something with proper planning that we can make sure doesn't impact you. Because we just can't be at the mercy of the market, something that we can't control. 

And then we want to think about taxes, which is taxes is what we talked about earlier. And the primary way that a lot of people save for retirement is they use traditional retirement accounts. That's that 403b, 457 plan, that's that 401k. And these tax-deferred vehicles, easy for me to say, can be a great place to save money to put money because you feel like you're gonna use quotations, saving on the taxes, but you're not really saving, you're just deferring them into the future. 

And so it can feel like a good place to put $1. But then it's going to feel like the worst place to spend $1. Because every dollar that comes out is going to be taxed at your highest marginal rate. And depending on what tax rates are, you could actually find that you've done some reverse tax planning. 

John: I see it all the time.

April: Meaning that you saved taxes today at a lower rate, just to pay them at a higher rate later. That's not what you intend to do with that, that's not what you want to do with these tax-deferred vehicles. But that's something that we see. Because a lot of people think, they've heard, they've been told that they are going to be in a lower tax bracket when they retire, but we don't find that to be true. Most people are in the same tax bracket or higher. The next thing is going to be on inflation. 

So inflation, and we've been talking a lot about inflation these last few years. And while we're working, a lot of times, you don't feel the effects of inflation. Now, sometimes you may see something very specific, like the price of gas, right, that's something that's easy for us to track. And in the last few years, we've definitely heard a lot about inflation in the media, so we pay attention to it more. But when we're working, as we earn more money, as we get pay increases, as we get raises, as we change jobs, those pay increases help combat inflation. 

So when we're in retirement, and we feel like we're on more of a fixed income, and now that everything goes up, gets more expensive, especially health care, you only have two choices. I can take more money out of my accounts, which means I'm taking more risk that I'm going to run out of money. Or you can spend less. You can downsize your lifestyle. That sounds good.

John: That's exciting. That's a heck of a retirement. So I've worked my tail off for 30, 40, 50 years, and then I'm gonna go into retirement and spend less because I'm worried about inflation. And I don't want to take it out because I gotta pay taxes. And that's what people do, and they're calling it a trap. Their money's locked up, they can't enjoy the money.

April: And we find for most people, we don't want that for you. We want you to keep the same lifestyle you have today. In fact, I want you to have a better lifestyle. I want you to be able to do more in retirement. Because now you're going to have all that time. So now that I have time, do I have the money to go do the things that I want to do? So because these risks affect us so differently in retirement, we need to have a different set of rules to follow. 

And so we're going to share with you some of the rules that we follow in our work with clients. And these are things that we worked on and tweaked over the last few decades to help people have a better outcome. And so as we kind of get into this just know is what we're kind of thinking of is how do we mitigate some of this and put you in a better position. So the first thing that we want to do is we want to manage those risks that we just talked about. 

Because what gets people in trouble is that their account isn't invested properly, although that can be a contributor. The issue is that we haven't dealt with these risks. So we need a plan to deal with inflation, to deal with market volatility, to deal with higher health care costs, taxes, and living too long. And how we do that is we first want to look at your cash flow. So I want you to think of like cash flow allocation, not asset allocation, cash flow allocation. 

And when we're looking at cash flow, we're looking at your retirement income. We first look at guaranteed sources of income. We want enough guaranteed income to cover those basic living expenses. So that could be a pension, it could be Social Security. And then we want to look at having other variable incomes to cover discretionary spending. And one of the challenges that we face, even when looking at this cash flow allocation, again, is that loss of liquidity that we talked about earlier. 

That's true for both guaranteed sources of income and variable income. We often think of money being able to do two things at once, but it really can't. So what we want outside of this cash flow allocation is we want to have true liquidity. And true liquidity to us is money that's not allocated to pay you an income today, or in the future. 

So this bucket is here for you, whenever you need it, whenever you want it. You're free, right, without impacting your income later on. And then we also want to work towards minimizing taxes. So we want to look at ways how do we reduce taxes. How do we minimize, and strategically eliminate them over time? I'm going to explore all that so that we're not just at the mercy of whatever the tax rates are, especially if taxes go up.

John: Did you just say if? 

April: If, if.

John: We know they're going up. The question is when? 

April: Sooner than later.

John: I wish we had time to talk about taxes more, but just a reminder that in 2025, under current law, the income tax rates will go back to what they were before at the end of that year because they're gonna be sunset unless something changes in Congress where they make it permanent, but it's temporary now.

April: That's right. Two more years of current tax law before that changes. So let's talk about how do you have an optimal structure or a balanced structure. So first, we want to have that bucket that's going to give you the liquidity. This is something that we talk about all the time with our clients, sometimes we're kind of beating that drum. Broken record about that liquidity.

John: But it's so important because so many people, they don't have enough money liquid, that if they have an emergency, and then we see people have to raid their investment accounts with their retirement accounts, and the retirement account is the worst place in the world to go pull money out.

April: So we first start with having this true liquidity. And then we will look at again, on this income plan we first look at those guaranteed income sources. So what do you have as far as social security income? Is there a pension? Is there an annuity? Where's that guaranteed income coming from? And we want that to be enough to cover those basic living expenses. And then from there, we want to have two other buckets on your balance sheet. 

We want to have one for variable income. So I want you to think variable, I also like the word discretionary. Because we've got basic living expenses covered. So then we want a bucket we can tap into for discretionary income. You want to take that trip, you want to remodel the house, you want to help the kids, whatever that is, but to have this bucket that you can tap into for discretionary income. 

And then you also want assets that are going to continue to grow on your balance sheet. Because we know that you're going to need more income tomorrow than you do today. Back to that inflation piece. So if we're going to try to combat inflation, we've got to have buckets on our balance sheet that are continuing to grow, that we're not tapping into yet, yet to being the key word for income. 

So this is this structure that we look at from a retirement planning standpoint for clients. What kind of liquidity do we have? Do we have enough liquidity? What are our guaranteed streams of income? And then we want to have discretionary income, and then also growth buckets as well. Because if we do this, and we do this well, we want to create, where we've got this team, think about a team of specialists where each bucket of money is doing exactly what it's intended to do. 

It's not doing multiple things. It's doing exactly what it's supposed to be doing. And by doing this, it can help us, we can take less risk. We don't have to be as risky with our money. We can save on taxes by looking at how we're taking the income from our different buckets. And we've got that liquidity. And ideally, we should be able to produce more income as well. So everything is allowed to do its job, just not a different one. 

John: Specialty. Like you said.

April: Yes.

John: It's doing its job. 

April: It's doing its job. So important. We are big fans of a bucket strategy for it to have its job and to do that well. So as you're trying to think about retirement for yourself, there are some key questions for you to think about and kind of answer as you're getting prepared for this next phase. So let's go into thinking about these next questions to ask yourself so that you can be prepared for retirement. And when we think about a retirement vision, I want you to think about what do you want retirement to look like for you. 

And there are five key areas that we look at. Relationships, housing, lifestyle, health, and financial. So with relationships, think about who are the important people in your life. What about kids? Grandkids? Are their aging parents that you're supporting? We're seeing that more and more. Those that are still working too, sometimes call it the sandwich generation where you're taking care of parents and kids at the same time. And then will you need to support any of them in any way? 

But I think it's important to think about who are these people in your life that you want to spend time with. Because again, if we step off into retirement, we're not working, what are we going to be doing with our time? We talk about a lot with clients about making sure that we're retiring to something, not from something. And now that you're gonna have all this free time, what are you gonna do with it?

John: What good is the time if you can't enjoy it? If you can't afford to do the things you want to do? So you can have all the money in the world. But if you don't have the time, is the money that important? And vice versa?

April: That's right. And then what about housing? Will you stay in your current home? Will you downsize? Or will you move to a different city or a different state? I was just talking with a client earlier today. And she's planning to sell her house in the next few years. She doesn't know exactly when. But she's in a big house. She said she doesn't need a big house anymore. It's just her. It's an older home. So it's got some expenses that come with that. Lots of repairs. And so she's considering downsizing. We've had clients that when they retire, they move. I'm thinking of a couple who moved to Orlando to be next to their daughter who was about to have a baby. And that was part of their retirement plan.

John: You know something that has surprised me in my career. In the last 10, maybe 13 years, I've seen more people who just pull the plug and move somewhere. I'm thinking of how many people do we know that moved to North Carolina, North Georgia.

April: Virginia.

John: Virginia. That just simply said, okay, we're unplugging, and I'm like, what? Your life has been yours all these years. And they're just perfectly okay with doing it. 20 years ago, people didn't think that way. But today, we've become more mobile. And people are okay with, hey, I'm just gonna start over. Surprises me. Surprises me the number of people we've had that did that. And it's working for them. But also we've had people move to be closer to children and grandchildren, and they go, oops, that was a mistake. Because now we're nothing more than a glorified babysitter. Remember that?

April: Yes. Yes. And then oh, here's one thing, too, I was going to say about if you do you plan to stay in your home, because we talk about this a lot, is aging in place. So if you're staying in your current home, then we want to have a plan for aging in place. So what are some of those things, those renovations, those remodels that you can do now, so that your house is better prepared for that?

John: I can speak to that one for you. After my amputation, I had to totally remodel my house to where it was wheelchair accessible. Totally had to redo it.

April: So wheelchair accessible, having grab bars, having walk-in showers, roll-in showers. Plan for around stairs. These are all things that you can do to age in place. The other thing I think about too, is just as normal kind of big-ticket items for your house. So a lot of people will replace the roof, replace the air conditioner, and kind of get some of those big ticket items done while they're still working. So they don't have to worry about it in retirement.

John: But there's an issue here. Sometimes people discover that it costs more to downsize than to stay where they are. With the cost of real estate today, and selling that and having to pay a higher property tax. We're seeing more and more people are taking the route of you know what? I think I'll take the money, do the improvements and just stay where I am.

April: That's right. I've seen that a lot. And then, what about lifestyle? What will your lifestyle be in retirement? So I hear this a lot. Hey, we don't have you know, big plans for retirement. We just want to keep the same lifestyle that we have today. But what will you do? How do you see your future when every day is a Saturday? 

And what I mean by that is, if you've been working Monday through Friday, and you've just had the weekend to go do what you want to do. What about now that you're in retirement and every day is the weekend? What will you do with your time? Now, we've got clients who say all the time, they're busier now than they were when they were working. 

They don't know how they ever managed to have time to work, because their social calendars are so full. I love one of our clients, this is when he was 90, and we were trying to schedule a time to meet. And he said, you know, April, I've got to give up some of my social commitments because I have no free time. And I just love that. And that's what I want to be when I'm 90. I want to have a social calendar so full. 

John: That's why he's 90. Because he's kept active.

April: That's right. And then how about those things that you've always wanted to do? And I say life got in the way, but maybe we should say work got in the way. What will you do now that you have the time? Will you volunteer? Will you work on a hobby? Is it golf or pickleball? What are those things that you're going to do now? I was just talking with some clients this week, and they had just been golfing that morning. 

And that's something that they do several times a week together. And that's part of their lifestyle in retirement. What about your health? So health care costs are a big unknown in retirement. So there are a couple of questions for you. How much do you currently spend on health care? A lot of times we don't know. We don't know how much we're spending on health insurance. We don't know how much we spend throughout the year on healthcare costs. 

And are there known healthcare concerns that might impact you? That's something that you know that you need to plan for? Or is it just going to be more of those unknown issues? When we think about health, a lot of people wait to retire to 65. So they can have health insurance, they can go on Medicare? So do we have a plan for that? What is that going to look like for you? 

And I think about just not your health but others' health. Are there other people that you're going to have to help? Or is that going to impact you in some way? And then of course, financial. So financial, couple of key questions for you to think about here. But how do you earn your money today? You have a salary and an income but, how do you earn your money? Do you have any debt? And will it be paid off by the time you retire? 

How much money are you putting into savings? So if you know how much your gross income, then how much are you putting into some sort of savings and investment retirement accounts? How much are you putting back on your balance sheet somewhere? And then do you have a spending plan for retirement? I don't like the term budget. 

I think it has a negative connotation. I think of a budget like going on a diet. It's very restrictive. You know what, you're not going to stick to a budget very long. And so instead of having a budget that's very restrictive, because with a budget, what we do is we try to say what's the least amount that I can spend, but that's not living your life.

John: We've been talking about time quite a bit. I just had a thought. Think about this, it doesn't matter if you are an employee, or if you're self-employed. What you're doing to earn money is your trading your time, and your talent, and your skills in exchange for money. So if we live long enough, we're gonna find that we may, not may, we will diminish somewhat in those skills and talents. So we hear people say, well I'll never retire. Well, you may be forced to retire because of health issues. 

So as long as you're able to work, I'm 71 years old, I'm still working. About three days a week, enjoy what I'm doing, love what I do, so I don't wanna quit. But I want to be able to not work if I don't have to. I've been able to put myself in a position and I call it being financially independent, where I don't have to work, I get to work. And I hope that everybody listening will buy into that concept. Put yourself in a position of work if you want to, but not because you have to.

April: Absolutely. And all of these pieces help with that. Because you might look at the financial side and say, well, I could retire today, but I'm going to continue working because I want to. That puts you in a totally different place.

John: Puts you in a different place mentally, physically, emotionally, where you don't have to put up with nonsense if you don't want to deal with it.

April: So in going through this today we've talked about why traditional planning doesn't work for retirement. We talked about five financial risks in retirement, and how do we avoid those. And then we also went through some questions to ask yourself, so you can be better prepared for retirement. And what you might be wondering now is, okay, April this sounds good, what are the actual steps that I need to take to get there? 

And that's an area in which we can help you. And so what we would recommend is the next step would be is to schedule a focus session. Okay, this is where we can start working on your own personal retirement roadmap, is by scheduling a focus session with us. So you do that, you book your focus session by going to our website, which is curryschoenfinancial.com. 

And you're going to see, you can click on schedule a call in the upper right-hand corner. 

There's gonna be a button for you, it's going to bring you to a calendar, and you can pick a day and time that works for you. You can also call our office at 850-562-3000. And here's what's gonna happen on this call. The first thing we're going to do is we're gonna get clarity. We're gonna get real clear about what are your goals. What are your concerns? What are some opportunities that are available to you? 

We're going to talk about that kind of roadmap, we looked at earlier and see, where are you today and do you have some of those pieces in place? What are the roadblocks in your way? And then usually, we have a couple of ideas that we can share with you to help make some tweaks, make some changes that put you in a better place. 

So this call, it's really for you, if you're motivated, you're an action taker, you're open to new ideas you're willing to learn. But the call is not for you, if you're not motivated, you're not willing to learn, or you're just looking for some unpaid consulting. And so the best way to schedule that call, again, is to go to our website and click on schedule a call on the upper right-hand side. 

So I'd say while we're even on this webinar, or you're listening to this later, I'd recommend you go ahead and book a call while it's on your mind because life gets busy. We forget to do the things that we want to do. Or we think we're going to do it soon. And the next thing we know, it's been six months. And so there's a cost to waiting. And this cost of waiting is we don't have clarity, we don't have direction, we don't reach our goals on time. And time is a precious asset when it comes to wealth building. 

You know, I think back to our client, Janet, the one we talked about earlier. And she'd been really busy building her career. And then she realized that time was slipping away. And she started to worry. And when we sat down and looked at everything, she told me, she's like, I feel like I'm behind the eight ball. And she was taking on a lot of risk in her assets, in her retirement account, way too much risk because she was trying to use the market as a way to save less. 

But you know, it doesn't always work out that way. Not a very good way to go about it. But here's something that's actually interesting. I actually first spoke with Janet five years prior to working with her when she was 52. And she was referred to us by another client. But she said the timing wasn't good for her then. And it took five years before we got back together. 

Now I want you to think for a second if she had worked with us when we first met her when she was 52. And how much of a difference that would have been in her life. That could mean that she would have more spending, more money to enjoy today. That could mean that we would have been planning on her retiring at 65 instead of 70. That's a big deal. That's a big deal.

John: Yes, it is.

April: That's why this is so important. And it's why you've got to be proactive with your money. Now sometimes there are these obstacles that get in our way. And sometimes people say, well, April I already have an advisor. And if you do that's wonderful. Our goal is not to disrupt an already existing relationship, but it's how can we provide value, and some people deep down, they don't want to face their financial situation. 

They have these emotional barriers because they're worried about what it might reveal. But just know that we're here to support and guide you. I actually have a sign in my office, that says this is a judgment-free zone. Because it is. It's a great place where you can talk about freely your goals and your challenges and your aspirations. And then this idea of a perceived cost, like how much is this going to cost me? 

So our initial talks, this focus session we're talking about, there's no charge, that's complimentary. And we take time to understand your goals and your concerns. And then if we decide, if both of us decide it makes sense for us to move forward and work together, we're going to go through different pricing options with you that align with what you need. 

So the best thing, the best way to book that call, again, is to go to our website. So curryschoenfinancial.com. And then you're going to see a button in the top right-hand corner that says book a call. Also on our website is a link to our podcast so you can see our podcasts and see podcasts that we've released. 

You can download those onto your phone if you've got the podcast app, through Apple, or even on Spotify, but they're also on our website as well. And I just wanna say thank you guys, again, for joining us today. I think it's really, it's good to see that you're taking this time out of your day to work on something as important as this. We hope you've enjoyed it and found it impactful and look forward to talking to you soon.

John: It's always fun to do these. It's just good information, get it out there. And you know, for the people that are ready, we're here for you.

April: That's right. Bye, everyone. Have a good day.

John: Goodbye.

Voiceover: This material is intended for general public use. By providing this content, Park Avenue Securities, LLC and your financial representative are not undertaking to provide investment advice, or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. If you would like additional information about our services, you can visit our website at curryschoenfinancial.com. Or you can call our office at 850-562-3000. Again, that number is 850-562-3000. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities, Guardian, or North Florida Financial, and opinions stated are their own. April and John are registered representatives and financial advisors of Park Avenue Securities, LLC. Address 3664 Coolidge Court, Tallahassee Florida, zip code 32311. Phone number 850-562-9075. Securities, products, and advisory services offered through Park Avenue Securities, Member of FINRA and SIPC. April is a financial representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is a wholly-owned subsidiary of Guardian. North Florida Financial is not an affiliate or subsidiary of Park Avenue Securities or Guardian.

2024-169550. Expires April 2026.

Inflation-Proof Your Retirement

Navigate through retirement with confidence as April Schoen addresses the silent thief, inflation, revealing strategies to protect your financial future.

In this episode, we’ll dive deep into understanding inflation and its impact on your retirement dreams.

• Unpack the essentials of inflation and its direct impact on your retirement savings.

• Discover historical perspectives on inflation to better understand its cyclical nature.

• Explore strategic ways to combat inflation, from guaranteed income streams to growth assets.

• Gain insights into personalized inflation rates and how to calculate yours for precise retirement planning.

Ready to secure your retirement against the eroding effects of inflation? Join April Schoen for invaluable insights and strategies on the Secure Retirement podcast. Available now on Spotify and Apple Podcasts.

Mentioned in this episode:

• https://curryschoenfinancial.com

Transcript

​​April Schoen: Welcome back to The Secure Retirement podcast, where we help guide you through the complexities of planning for your retirement. And today, this is gonna be another Ask April episode where I take some of those common questions we get from clients and really dive deep. My name is April Schoen. And today we're going to be talking about inflation. So inflation is like that current that can suddenly erode your purchasing power of your savings and your income over time. And in this episode, we're going to talk about what inflation means for your retirement plans and how do you steer a steady course in the face of its challenges? 

Well, let's start with the basics. So what is inflation? So imagine you're at your favorite coffee shop, and a year ago, you could get your latte for $4. But today, you go in and they say that'll be $4.50, please. Well, that extra $.50 is inflation and action. And inflation is the rate at which the general level of prices for goods and services is rising. And as those prices rise, it can erode our purchasing power. And this number that you hear quoted in the media, what they're talking about is they're comparing prices today, to a year ago. This is why your dollar may buy less today than it did last year. 

For example, as of January 2024, the inflation rate is 3.1%. That means the cost for goods and services across the economy is 3.1% higher than it was this time last year, January of 2023. And as we kind of look forward looking, there's a lot of economists that believe that inflation may kind of stick around this like two and a half to 3% number by the end of the year. Now, you may be wondering, why do I care about this? Well, I think it's for that exact reason about prices continuing to rise. I can remember when you could go to the grocery store and fill up your cart for about $50 a week. And today you're lucky to get out of the produce section for that. 

So for us dreaming of retirement, understanding inflation is like knowing the weather before going on a sailing trip. It helps us prepare. So we don't capsize our budget, the moment that we set sail into retirement. Especially think about living into retirement 20 or 30 years, or more for that matter. So how do we combat inflation? So here's kind of the kicker is when we're working, this is very different from when we're in our working years and then when we are in retirement. Because when we're working, when we're in our working years, we have a secret weapon against inflation. And that's our salary. It usually goes up over time, right? You may get pay increases, you may get promotions, you may change jobs, and that increasing salary is what helps offset inflation. 

But what happens when you get into retirement because you don't get those salary increases anymore. Now, Social Security does have built in a cost of living adjustment. But there have been several years in our recent history when there wasn't an increase. And did you know that usually when your Social Security benefits go up, that your Medicare premiums go up as well. So really, you can view that Social Security increase as a way to keep up with rising Medicare premium costs. 

Now, what if you have a pension? So one key question to ask is, do you have a cost of living adjustment on your pension? And what is it? If you're retiring from the state of Florida, it's likely somewhere between two and 3%. Hey, listen, I know that doesn't sound like a lot sometimes. But trust me over a 20 or 30 year retirement that two to 3% increase is really going to add up. Because there's a lot of corporate pensions that do not have a cost of living adjustment. Talk about living on a fixed income. So what do you do to combat that? 

Well, we're gonna get into some key strategies in this episode. But before we get into the strategies on how to combat inflation, I really want us to actually go back and look at history and talk about how inflation has impacted our economy over time, so that we can see how it's ebbed and flowed. And this is really important for us to understand because sometimes it can feel like this is the only time we've ever experienced what's going on today. For example, in 2022, when we had really, really high inflation, the highest we've had in decades, it can feel like we've never experienced this before, when that's not really accurate. 

We've seen this happen time and time again. So it's good for us to go back and get a refresher. And listen, I think a lot of you are going to remember this and how our inflation was at these different times, and how that impacted our overall economy. So I want to start back in the 1970s. This was a decade that is known as stagflation. Okay, that was stagnant economic growth. So the economy wasn't really growing, but we had really high inflation. Does that sound familiar? Now, at this time, we had oil crises that were leading to skyrocketing fuel prices, which then pushed up the cost across the board. 

We see that happening today, too, right? When we have some supply chain issues, that will also cause us to see a rising cost of goods and services, whether that is fuel costs or other supply chain disruptions. And listen, that was a really tough time for savers because the value of money didn't just slide, it plummeted. We had really, really high inflation. Now, if you go fast forward to the 80s, we see where the Federal Reserve took some bold steps of hiking interest rates to try and tame this inflation. Again, does that sound familiar? Well, it worked in the 80s, but not without causing its own set of challenges, which included a very sharp recession. 

So these historical episodes teach us the ebb and flow of economic forces and the importance of being prepared. Because guess what we've been through it before, and will likely, we are going to see those same time frames again in the future, so we have to be prepared for it. Now, if we go into the 1990s, obviously, this was like the .com era, we had relative stability when it comes to inflation. We had tremendous economic growth, which was a very stark contrast to these volatile decades that we had before the 1990s. And we had these prudent monetary policies, we had this tech boom, right?

And so inflation was really kept at bay. And it really allowed for prosperity that defined that era. But then, as sometimes we say what goes up must come down, we enter into the early 2000s. And we really encountered a series of economic challenges that tested our resilience. We had several things happen back to back to back. We had the .com bubble burst at the dawn of the decade. And then we had the significant impact of the September 11 attacks in 2001. This really led to a lot of economic uncertainty. You remember, we had three years back to back when the market was down double digits. 

Now at the time, we were having all this economic uncertainty, inflation was relatively controlled. And then we get to 2008 when we had the great recession. And this Great Recession in 2008, was a global financial crisis that started with the collapse of the housing market. And in 2008 and 2009, we faced some of the most challenging economic conditions since the Great Depression. And sometimes we forget that. It wasn't that long ago that we went through this. And in the years that followed this crisis, we saw historically low interest rates and inflation. 

And this era of low inflation, in many ways, was by design, because central banks, including the Federal Reserve here in the United States, implemented policies that they were trying to stimulate economic growth, because our economy had basically come to a halt. And these policies included keeping interest rates low because when interest rates are low, it encourages people, it encourages companies to borrow and spend money. And then the opposite is also true. As interest rates are higher, it means that you're not encouraged, you're actually dis encouraged. It means you don't want to borrow money and you don't want to spend money. And so that's what helps constrict our economic growth, which can bring down prices. 

So for years, this strategy seemed to work. The economy gradually recovered, inflation remained low, and it was really an unprecedented period of economic stability and growth that we really got used to. I mean we had one of the longest bull runs in our history. But then the unexpected happened in 2020. The COVID 19 pandemic hit, and it turned the world and its economy's upside down. Suddenly there were supply chain disruptions everywhere, there was a surge in demand for certain goods and services as people were adapting to these lockdown procedures. And there was significant monetary stimulus to support economies that really lead to a very swift rise in inflation. 

So by 2022, we were witnessing inflation rates that we hadn't seen in decades. And the Federal Reserve along with other central banks around the world, they faced a daunting task, just like we saw in the 70s. They began to raise interest rates, trying to calm down this inflation. However, their goal that was achieved what's often called a soft landing, meaning they were looking at slowing inflation without pushing the economy into a recession. Talk about walking a tightrope, right? This is this balancing between being aggressive enough in raising interest rates to combat inflation, while being cautious not to halt the economy growth entirely. 

And as the Fed began adjusting interest rates upward, many eyed the economic indicators nervously. And if you remember going back to 2022, we had some of the highest inflation we've seen in decades, we had the highest interest rates that we've seen in a long time, and then the stock market and the bond market tumbled. And as the Fed began adjusting these rates, like I said, we were really keeping an eye on everything, wondering how far this cool off would go, and how much damage, if any, would it do to the economy. 

And as we moved into 2023, we began to see the effects of these policy changes. Inflation started to come down from its peak, although there were still lots of concerns about potential economic slowdowns. And again, with the current inflation rate that just came out today as I'm recording this for January 2024, is at 3.1%, with projections of it, likely going down some but probably going to be somewhere in the two and a half to 3% range by the end of the year. We have to understand that this situation remains fluid. There's also a possibility that we see interest rates rise again in the future. Excuse me, we see inflation rise again in the future, depending on what happens with interest rates. 

And so it's important that we understand history and see that we've gone through this before, and we're going to go through it again. But we have to understand that we need to remain fluid, right? That we need to be able to adapt our financial planning, especially as we approach retirement. So this inflation rate that you hear in the news, like I said, 3.1 for January this year. But here's a little secret, that number that's more of like a one size fits all. Your personal inflation rate is going to the beat of its own drum, especially if your retirement dreams include things like travel, fine dining, maybe a boat, right, some expensive toys. 

And so I'm going to talk about what is your personal rate of inflation? And so you may be asking April, how can I figure that out? How can I figure out what is my personal inflation rate? You want to start by tracking your spending. So look at where your money goes each month and how those costs have increased over time. And this is going to give you a clearer picture of your personal inflation rate. And that's going to help you better plan for retirement. Especially when we start thinking about health care costs. But it's not just about fighting inflation. It's understanding it, it's planning for it. It's using this information to make good decisions about our savings. 

So let's not let inflation just be this thief in the night. Let's turn the lights on. Let's face it head on, and let's secure our financial future. So how do we do that? How do we whip up a defense against this silent thief as we like to call inflation? Well, it starts with a plan. A plan that not only satisfies our lifestyle for today, but makes sure that we've got more money tomorrow, because that's the whole thing with inflation. We know that milk is going to cost more tomorrow than it does today, so we have to make sure that you're going to have more income in the future than you have today. 

And what about healthcare, healthcare is not getting any cheaper. And in fact, health care is climbing at a much faster clip than that inflation rate that we hear in the media, because that is a huge basket of all different types of goods and services. So healthcare is not getting any cheaper. And let's face it, we're not getting any younger. So as we look ahead, remember, inflation is just one part of the retirement planning puzzle. So let's get into some strategies that we talk about with clients for how to combat inflation. 

And you know, this process that we go through with our clients, we want to really make sure they've got enough income in retirement to support their lifestyle today, so that you can keep living the same great life that you have when you step off into this wonderful thing called retirement, and making sure that you're going to have more money down the line when you need it. So the first step in our process involves mapping out what are your guaranteed streams of income in retirement. These guaranteed streams of income, I want you to think of these as your financial lifeboat, they are essential to keeping you afloat. 

So what are some choices, options? What could some of these guaranteed streams of income be? Well, this could come from Social Security, this could come from a pension, and this could come from annuities. And the goal here is to have enough guaranteed income to cover your basic living expenses. It's like ensuring that you have enough supplies for the voyage. Covering everything you need from provisions to emergency gear. So once we have that figured out, right, we've got enough guaranteed income to cover our basic living expenses, then we can move on to being more strategic. 

We want to talk about two very distinct buckets on your balance sheet, so that you're well rounded. So you're balanced. And this first bucket is for discretionary income. Okay, so sometimes you can think of this as like your adventure fund. Imagine you want to take that dream Alaskan cruise, or maybe you're tackling some home renovations. So you want to have a bucket that you can go to for discretionary income that's outside of our basic living expenses. And then what about the future? Right, so that brings us to our second bucket, we want to grow assets. We want a bucket on your balance sheet that's continuing to grow for the future to help offset that inflation. To be that natural inflation hedge for you. 

This is like a treasure chest that you're not drawing from now, but you're letting grow for tomorrow. And this bucket is crucial for helping you outpace inflation in the long term. But I will, I'm gonna give you some tips here. And a word of caution for some careful consideration. You really want to pay attention to what type of account, what type of investment you're using for this growth bucket, because not all types of accounts are really going to help you satisfy that goal, that need. So if we think about traditional pre tax retirement accounts, like an IRA, a 401k, the deferred comp, a 403b they all come with a caveat. And that's required minimum distributions. 

And the current age for RMDs, or required minimum distributions is 73. And in nine years or so it's gonna go to 75. But these RMDs mean that you have to start pulling money out of those accounts, at currently 73 whether you want to or not. So when you've got pre tax retirement accounts, when you know you have to start tapping into them at some point in the future, so that may not align with your growth strategy. So instead, you want to look towards vessels like Roth IRAs, non retirement brokerage accounts, cash value life insurance for those growth assets. 

Because these options offer you flexibility, they offer you the potential for growth without having to take money out of them, keeping that treasure chest intact for when you really need it. And implementing some of these ideas in your retirement planning is like charting a course with precision navigation. So by securing those guaranteed incomes for necessities, and then you've got setting aside funds for life's adventures or unexpected turns, and then strategically growing your assets for the future is really going to give you that confidence to know hey, I've got enough income today to live the life I want to live. 

I've got buckets, I can go to if I need it or want it and I've got money that's continuing to grow for the future. That allows you to be not only prepared, but have resources so that you can adapt, right, because with the right strategies in place, you can really make sure that your retirement journey isn't just surviving. Because I don't want you to just survive, I want you to thrive. I want you to have a beautiful, wonderful retirement where you get to go and do all the things that you've been dreaming of, no matter the economic currents. 

So to bring this discussion to life, I want to share a couple of stories from some clients of ours that have really done a great job with some planning and helping navigate not just retirement, but also this inflation piece. So I want to talk about Sarah and Tom, and then also Marcus, with each of their unique strategies, that they all had this common goal of having a smooth sail into retirement. So let's talk about Sara and Tom, a couple that they were really looking forward to retire but they couldn't wait to, they've got some big plans, they already have some travel booked for their retirement, some places that they've always wanted to go. 

And they're also excited about being able to spend more time with their grandchildren. Their grandchildren don't live here in town. So they're going to be traveling to different places like Orlando and Chicago, to see their grandchildren. And they're really excited about just having some of that flexibility for their time. And then they're also really excited about being able to volunteer more, because I know Sarah mentioned, there's a lot of organizations that mean a lot to them. And they just feel like they haven't had the time to really be able to volunteer like they'd like to. 

So in their planning, they had several types of accounts, and different sources of income. So for income, they both have a pension from the state of Florida and their Social Security benefits. So this is their guaranteed streams of income. And then for retirement accounts, one has deferred comp, a 457 plan, and then one has a 403b. And these accounts really are allowing them to provide them discretionary income. And then they also wisely invested in Roth IRAs and cash value life insurance, because they understood the importance of having this growth bucket that would be untouched by immediate needs, and will be able to grow over time. 

So that Roth IRA provided them with tax free growth, and tax free withdrawals. While the cash value life insurance offered a flexible, tax efficient way to either pass on wealth, or tap in to it if they need. So in choosing these vehicles wisely, it meant that they're well prepared to face inflation. They get to live the life they want to today without worrying about the eroding effects of rising cost. And then there's Marcus. Marcus is not married, he's single. And what he really wants to do is he wants to maintain his lifestyle in retirement. But he also wants to maintain his independence in retirement.

So that's very important to him to have his independence. And so making sure that his money is still growing, to help him with that piece. So Marcus has a traditional retirement account from a 401k that he had with his employer. He's got a Roth IRA. And then much like Sarah and Tom, he diversified into a non retirement brokerage account. So this mix gave him both some tax free income, the potential for capital gains and income from his brokerage account investments. But Marcus was also very strategic about his required minimum distributions from his retirement account. 

Because Marcus realized he didn't necessarily need all of his required minimum distributions for his day to day expenses. So what he's been doing, he's been reinvesting the after tax proceeds into his growth bucket. So now what he's doing is he's turning this mandatory distribution into an opportunity for further growth. So Marcus' story is a prime example of turning a potential obstacle into an advantage. The RMDs required minimum distributions, they're often seen as a drawback to traditional retirement accounts due to their taxable nature and the forced withdrawals. 

This really became a tool in Marcus' arsenal for fighting inflation, because by reinvesting these funds, not only did he keep his growth bucket growing, swelling even, but he's strategically managing his tax situation, ensuring that more of his money is working for him. And so these client stories really underscored the power of proactive planning and strategic thinking in retirement. So whether it's choosing the right mix of accounts or turning RMDs into a growth strategy, the key is really understanding your financial landscape because it's different for everyone, and making it work for you. 

So these stories show how with the right planning tools and mindset, navigating the complexities of retirement inflation, can really lead to a fulfilling and financially secure retirement. And that's what I want for all my clients, a financially secure retirement, but also to be fulfilling. For you to feel happy and good, and be able to live out those dreams that you have. So as you're thinking about these stories I was just telling you of Sarah and Tom and Marcus, consider how you can apply some similar tactics into your own retirement planning. 

Remember, inflation is inevitable. We cannot hide from it. It's an inevitable part of our economic landscape. But it doesn't mean it has to dictate or control the terms of your retirement. With the right preparation, identifying those guaranteed sources of income, creating diverse income buckets, and strategically managing your assets, you can not only withstand the pressures of inflation, but you can thrive in spite of them. Sarah and Tom showed us the value of tax efficient growth through Roth IRAs and cash value life insurance. Marcus demonstrated how leveraging RMDs for continued investment turned a requirement into an opportunity, right. 

So as you chart your course forward, remember that the seas of the economy are always changing. So we need to stay informed, we need to stay diligent, and we need to stay adaptable. So if right now you're feeling unsure about how to navigate these waters, remember, you don't have to do this alone. Financial advisors, financial planners, much like seasoned captains, we can help guide you through these complexities ensuring that your journey is not just successful, but enjoyable. So if you're unsure about your current plan, I'd encourage you to reach out. 

Booking a call with us is really the first step toward a retirement plan that's tailored just for you. That's ensuring that every aspect of your financial future is aligned with your dreams and goals. We do not believe in a one size fits all here. We work with each client individually on their plan. So let me tell you how you can book a call. It's very simple, you can go to our website, which is curryschoenfinancial.com. And we'll link it in the show notes. And then at the top, you're going to click on the button that says schedule a call. And you're going to see an option to book a 30 minute phone call. 

So just click on that, it's going to show you our calendar. And you can pick a day and time that works for you. So again, that is curryschoenfinancial.com And then you're gonna click on the link that says schedule a call. It's that easy. So I just want to say as we're wrapping up today, thank you for joining us today on The Secure Retirement podcast. Again, I'm April Schoen. I'm loving doing these episodes, and we're happy to help you kind of navigate this world of not just retirement but I love getting specific topics like inflation, and talking about them in more detail. 

So if today's episode has sparked some questions, some ideas you have some stories of your own to share, reach out, I'd love to hear from you. And until we meet again, keep your eyes on the horizon, your hands steady on the wheel, and I hope you enjoy the journey. Here's to charting a course to a future filled with prosperity, peace and possibility. See you next time.

Voiceover: This material is intended for general public use. By providing this content. Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation or otherwise act in a fiduciary capacity. If you'd like additional information about our services, you can visit our website at curryschoenfinancial.com or you can call our office at 850-562-3000. Again, that number is 850-562-3000. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities, Guardian or North Florida Financial and opinions stated are their own. April and John are registered representatives and financial advisors of Park Avenue Securities LLC. Address 3664 Coolidge Court, Tallahassee, Florida. Zip Code 32311. Phone number 850-562-9075. Securities, products, and advisory services offered through Park Avenue Securities, Member of FINRA and SIPC. April as a financial representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is a wholly owned subsidiary of Guardian. North Florida Financial is not an affiliate or subsidiary of Park Avenue Securities or Guardian.

2024-169548. Expires March 2026.

Maximizing Social Security: Strategies for Retirement Success

Feeling overwhelmed by Social Security decisions for your retirement? Unravel the complexities of this critical component of retirement planning in today's episode.

Join me, your guide in the maze of retirement planning, as I illuminate the often puzzling world of Social Security. From timing your benefits to understanding the system's history and strategizing for maximum returns, I offer a wealth of knowledge to help secure your financial future.

• Discover when to ideally start your Social Security benefits to maximize your retirement income.

• Dive into the fascinating history of Social Security with the story of Ida May Fuller, the first recipient.

• Learn about the critical role of work credits and average indexed monthly earnings in determining your Social Security benefits.

• Understand the unique strategies couples can employ to boost their combined Social Security benefits.

• Hear real-life stories of retirees who navigated Social Security decisions to enhance their financial stability.

• And more

Ready to master the art of Social Security for a fulfilling and financially secure retirement? Tune in to the full episode for invaluable insights and strategies. Subscribe on Spotify, Apple Podcasts, or simply hit play on the player above to start listening now.

Mentioned in this episode:

• https://curryschoenfinancial.com

Transcript

April Schoen: Welcome back to another episode of The Secure Retirement podcast, where we dive headfirst into the world of personal finance, with an emphasis on making sure you're prepared to live the retirement life you want to live. My name is April Schoen and today we're going to tackle one of the biggest in retirement planning. And that's Social Security. Yes, that piece of the puzzle that sometimes can feel like you're trying to solve a Rubik's Cube blindfolded. 

So let's talk about timing. When to take Social Security is a huge decision. And it is likely going to be one of the biggest decisions you make when it comes to planning your retirement. I run calculations of when to take Social Security for my clients multiple times a week. And just the other day I had a meeting with a couple, the wife let's call her Jane, she was planning to wait until her full retirement age to start her Social Security benefits. That sounds reasonable, right? But here's the catch. She isn't working right now. It's going to be another three years before she hits that magic age. 

Meanwhile, her husband, let's call him John isn't retiring yet, but he's moving to a part time position, meaning his income is going to take a dip. So as we started looking into this, my suggestion was, hey, Jane, why don't you start your Social Security now? Why? Because time is money, friends. And by starting now, Jane gets to enjoy that income for three whole years. If she waited, she'd need about eight years just to break even on the higher amount she'd get later. For Jane, having this bird in the hand versus bird in the bush made total sense. But remember, everyone's story is a little bit different. And for some waiting is the golden ticket. 

Now I know what you're thinking. But April, how does this Social Security thing actually work? Well, we're gonna get into some of the nitty gritty today. And so let's start with the basics. Social Security is like an old friend who's been around since the 1930s. The Social Security Act was signed into law by President Roosevelt on August 14, 1935. The new act created a social insurance program designed to pay retired workers aged 65 and older a continuing income after retirement. 

Okay, let's take a quick detour down memory lane to where it all began. I want you to picture this. The years 1940 and a woman named Ida May Fuller receives the very first social security check. Now Ida May isn't just any woman, she's about to become the poster child for retirement planning. Ida May, a spry 65 year old gets a check from Social Security for $22.54. I know what you're thinking that's like the price of like a decent meal today. But back then it was a significant step toward financial security. But here's the funny thing. She only paid $24.75 into Social Security, from taxes from her work as a legal secretary. Talk about a good return on her investment. 

But here's where things get interesting. Ida May lived to the ripe old age of 100. Yes, you heard that right, a full century. And during her lifetime, she collected a total of $22,888 in Social Security benefits. Now, let's put on our financial thinking caps. If you do the math, Ida May put in less than $25. And she got back over 22,000. That's like hitting the jackpot. But before you start thinking of Social Security as your personal slot machine, remember, it's designed to be a safety net, not the whole safety circus. Ida May's story is extraordinary. But it's also a reminder of the value of Social Security and why it's crucial to understand how it fits into your retirement plan. 

So whether you're Jane or John and considering to take a leap into starting your Social Security benefits, let Ida May's story be a lesson. That this system can work wonders, but it's your planning that makes all the difference. So how is Social Security funded? I think you already know the answer. It's taxes. Right? So if you ever look at your paycheck and notice those FICA deductions, yes, yes, I know. Sometimes it's hard to see where all the money goes. But here's what this part is hiding. It's hiding in Social Security. 

Because every time you earn $1, a piece of it, 7.65% to be exact, goes straight into the Social Security pot. And if you're self employed, you're contributing twice as much, because you're covering both the employee and the employer share. That's 15.3% of your net earnings. But if you're an employee, remember you're putting in 7.65 and your employer is matching that. And here's the good thing. When you retire, you don't have to pay that tax on Social Security income, pensions, income from retirement plans, investment accounts, other passive income, you just pay that on earned income. 

But it's not just about what you put in, it's about how all of us working together contribute, because this pool of funds is then used to pay out current retirees and other beneficiaries of Social Security. Like people who may be disabled, survivors and dependents. You know, in a neat twist of fate, that first person to receive that Social Security check, Ida May Fuller, you know, she only contributed three years into Social Security before she retired, yet she lived long enough to see Social Security become a cornerstone of American retirement. 

So the next time you see that deduction, remember, it's not just a deduction, it's your stake in this tradition that's been keeping people afloat for decades. And when it's your turn to retire, you'll be part of the cycle, reaping the rewards of the work you've done. Okay, enough about where the money comes from. Let's talk about how do we make it count for you. There's definitely some secret sauce to Social Security. There's work credits, there's average indexed monthly earnings, and there's that magical phrase full retirement age. This is where you learn how to unlock Social Security's full benefits. 

First up is work credits. So how do you qualify for Social Security benefits? Well, you've got to have 40, work credits, and you can earn four credits per year. So let's say if you've got at least 10 years of work history, both you and your spouse will qualify not only for Social Security, but also for Medicare. Okay, so that's how you qualify. How you know that you're able to receive Social Security benefits. But then how much are you going to receive? Well, Social Security uses what's called an average indexed monthly earnings. 

And what they do is they take your highest 35 years of work history, your highest 35 years of earnings, and they adjust it for inflation. Because I'm sure you can remember, right, you know, that $1 back in the day, but way more than it buys today. And voila, this is your AIME, your average indexed monthly earnings. And they use this to calculate how much you'll actually receive from Social Security. So let's have a quick planning discussion. We've got clients who have chosen to work longer to make sure they've got 35 years of work history. Because if you don't have 35, they'll factor in zeros for those years that you don't have. And it really brings down your average. 

Now let's talk about timing, when to start Social Security. Social Security isn't a one size fit all hack. It's kind of more like those adjustable ones. You've got lots of options, folks. And it's all about what fits you best. So, you could punch your ticket to Social Security as early as 62. But here's the kicker, if you're still grinding away at the job, this probably isn't your best move. Why? Because there's something called an earnings test. It's like the bouncer at the club. And if you're making more than that limit, they cut off your benefits. Not so fun, right? Think of it like this. Wvery $2 you earn over this earnings limit, they take back $1 of your benefits. It's like having your slice of cake but not being able to actually eat it. 

Now, if you wait until you turn your full retirement age, or your FRA, you get your full benefits. You get the whole pie, no reductions, no penalties, just your whole benefits. And remember your full retirement age, your FRA, this is based on the year you were born. So it may not be the same as your neighbor. So you're going to want to check those details out. It's gonna be somewhere between age 66 and 67. But what if you're that patient type who can wait until the grand finale at age 70. Well friends, your patience is rewarded with delayed retirement credits. Your benefits get a boost each year you wait past your FRA all the way up to 70. It's kind of like adding some extra frosting on that retirement cake. 

But let's put the icing aside for a minute and let's have a real conversation about strategy. If you're working and you're loving it, and I mean really enjoying those Monday mornings, then delaying Social Security could be a very smart play. More time working equals less time worrying about stretching those dollars later. And here's a pro tip if you're married, you've got even more strategies to consider. Spousal benefits, survivor benefits, it's kind of like a chess game. And each move can really set up the next so that it literally pays to plan ahead. 

Now, don't get me wrong, retiring at age 62 can be the right call for some. Maybe you're ready to swap that briefcase for a fishing pole or those office heels for hiking boots. Just make sure that you're not leaving money on the table. And let's zoom out, look at the bigger picture. Your entire retirement landscape. Social Security, it's just a piece of the puzzle. A corner piece, sure, but you need the whole puzzle for that complete, cozy retirement picture. 

Now, I want you to imagine Social Security was the whole puzzle. But you know what it was never meant to be that. When it was first enacted, it was when it was first signed into the law books, it was designed to supplement retirement, to be a safety net, not the whole safety circus. You want to stroll through retirement, not sprint, because you're chasing the next dollar. That's why you gotta play the field with your assets. Like your retirement accounts, your savings, investments, maybe a side job, some consulting that you want to do to bring in some extra bucks. 

There's really kind of an art to it. And you've got to, you need to kind of think about like your retirement income ballet and you've got to choreograph. When are you going to dip into each pot. Take from one too early and you might shrink it down. Wait too long on another and you might miss out on some tax benefits. For instance, tapping into your tax deferred accounts. Like what if you have a 401k, a 403b, a 457, a traditional IRA. If you tap in those too soon, this can bump you into a higher bracket. And we want to keep Uncle Sam's fingers out of the pie as much as possible, right?

And then what about on those tax deferred accounts, you're required minimum distribution? How you have to start pulling from them at a certain age. But that's a whole other episode, one day for the podcast. So you've got to identify all your income sources. Think of them like streams feeding into a lake, you need to know which streams flow all year round, and which ones dry up come summer. You need to know how much they'll bring in, when to open the floodgates, and what's the tax impact. 

This is kind of like your financial ecosystem. When you coordinate when to take Social Security with your other assets, you're aiming for balance. You want every dollar to do its job, like a well trained actor in a play, playing their part to perfection. Remember, Social Security and retirement planning is personal. I'm sorry, but there's no one size fits all answer. It's about your life, your dreams, and yes, your finances. Creating a plan that harmonizes with your lifestyle is key. And that my friends is the real beauty of it. 

Now let's talk about some real life scenarios and retirees who made their financial picture work in harmony. How do they do it? Well, I'm about to spill the tea. Let's talk about some real life heroes without capes. Some of my clients. And first up, we're gonna call her Linda. Now Linda was in the dark about what's called survivor benefits for Social Security. You see, Linda's ex husband had passed away, and they were married for over a decade. That's a key number folks. Being married for 10 years or more. And Linda didn't realize that she was sitting on some potential benefits. 

So as we were digging through and going through what we call a retirement rehearsal, where we look at all your income streams in retirement, we play what if, and it's kind of again, throwing all the puzzle pieces on the table and seeing how to put it all in the right order so that we can maximize your benefits for you. Maximize your income. We uncovered that she could claim survivor benefits on her ex husband's record. But the plot thickens. While Linda collected those benefits, guess what was happening to her own benefit? It was growing. By how much? A whopping 132% by the time she hits 70. That's 10s of 1000s of dollars that she almost left on the table. And that, my friends is why you need to know the rules of the game. 

Now our next savvy saver, let's call him Bob. Bob had heard through the grapevine that he should get those social security benefits now before they're gone. Have you ever heard that before? But Bob was still working. And if he had taken benefits at 62 not only would he face a reduction in his income but he permanently reduce his benefits. He'd lock in a permanent reduction. Talk about a double whammy. Thankfully, we caught that in time and Bob avoided what could have been a costly mistake. But now he's on track. He's going to be getting his full benefits, no reductions when he retires. 

And let's not forget about the dynamic duo's, the countless couples I've worked with. When two people have two different earning records and ages, the when to take Social Security question becomes more of like a duet instead of a solo. So for those couples, it's not always a synchronized swim. Sometimes we decide it's best for one to take benefits early, while the others benefits is growing. Other times we find it's better to wait and let both grow. It's kind of like a chess game. And we're aiming for that checkmate against financial success. 

So what's the secret sauce? We run scenarios, we crunch numbers, we look at every angle. Taxes, longevity, health, dreams, right? It's not just about maximizing dollars, it's about maximizing happiness. And these stories aren't just feel good moments. They're lessons in disguise. They show us that Social Security is a tool. And like any tool, it's all about how you use it. And sometimes you need a financial handyman to help you use it right. 

I hope some of these stories of my clients give you some food for thought. But remember, your retirement is your own story to write. But let's pause for a moment. Because it's not all about the money, right? It's about how you want to live your life. Think about your health, your hobbies, your family, those travel dreams you have. Or maybe there's a company, a job, a side hustle that you've been itching to start. Maybe there's some volunteer work that you really want to get involved in. Something that sparks joy in a way that your current nine to five can't touch. 

Retirement is more than just some number, than just some financial goal. It's a new chapter, a renaissance of self. It's a time when you can finally let your passions take the front seat, and let's be real, do you still get that spark going to work? Or is it more like a flickering light bulb that's ready to go out. I know, I know, these decisions are as emotional as they are financial. I can't tell you how many people come in who are getting close to retire and tell me that they're second guessing themselves. They're worried. Did I make a mistake? And we walk through those numbers and they can see it in black and white, at least they can understand the financial side of their world and know that this next phase isn't just going to be okay, it's going to be great. 

But like I said, these are emotional decisions because there's comfort in the routine, in the familiar. There's also thrill in the new and the potential for what lies ahead. It's a personal journey, an opportunity to rediscover old loves and find new ones. It's about finding that sweet spot where finances health and happiness meet. And when it comes to social security, timing is a huge part of that equation. It's one of the tools in your belt, a resource to help you shape this new phase of life. Not something that totally defines it. 

So when you're looking at the horizon of retirement, take a moment and listen to your heart as well as your head. And don't go at this alone. Remember, we're here to help you. So whether you're ready to kick back at 62, or you want to power through to 70, we want to help you ensure that this retirement life you build is as fulfilling as it is financially sound. And as we think about how Social Security fits into your retirement plan, remember, it's just a piece of the puzzle, not the whole picture. 

And I can't help but mention and talk about the future of Social Security. Sometimes it feels very much like the weather in Florida, where it's a tad bit unpredictable. So stay informed, stay nimble, right. We'll keep you informed as much as we can about any sort of changes that may be coming down the pipeline. Folks, as we kind of wrap up on today's podcast before you go I want you to jot down on your calendar our event that we're having in February. On February 29th. Yes, the 29th because this year is a leap year, we're hosting an event where we're going to take it even further deep dive into Social Security. 

So whether you're going to be able to join us on a webinar, or you can swing by our in person seminar here in sunny Tallahassee, you're going to be in for a treat. We're going to go into a deep dive into all of these things I've just covered today and even more. And especially if you're here in person you get to ask all the questions, and we will answer them all to the best of our abilities. So listen, if today's episode made you curious or you liked it, it sparked some joy. Hey, hit that subscribe button, leave us a review, share it with someone who you feel like should listen to it as well. And until we meet again, I hope you keep those retirement dreams vivid, your plans robust, and hopefully throw in there a little bit of dash of humor as well. I wish you all well, and I'll see you on the next one.

Voiceover: This material is intended for general public use. By providing this content, Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation or otherwise act in a fiduciary capacity. If you'd like additional information about our services, you can visit our website at curryschoenfinancial.com or you can call our office at 850-562-3000. Again, that number is 850-562-3000. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with, or endorsed by, Park Avenue Securities, Guardian or North Florida Financial and opinions stated are their own. April and John are registered representatives and financial advisors of Park Avenue Securities LLC. Address 3664 Coolidge Court, Tallahassee, Florida, zip code 32311. Phone number 850-562-9075. Securities products and advisory services offered through Park Avenue Securities Member FINRA and SIPC. April is a financial representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is a wholly owned subsidiary of Guardian. North Florida Financial is not an affiliate or subsidiary of Park Avenue Securities or Guardian.

The Social Security Administration has not approved, endorsed or authorized this presentation. There is no charge to attend subsequent consultations. Contact the Social Security Administration for complete details regarding eligibility for benefits.

2024-167575. Expires February 2026.

Weathering the Financial Storm

How do you weather the storm during a financial crisis?—and not just weather the storm, but come out stronger?

In this episode, we show you how to prepare for a financial crisis, with actionable steps that allow you to face whatever comes your way.

We’ll cover: 

• The essential elements of financial resilience

• The early warning signs of a financial crisis

• Creating a comprehensive financial plan

• Emergency fund essentials

• Protecting your investments and retirement accounts

• And more

Mentioned in this episode:

• https://curryschoenfinancial.com

Transcript

April Schoen: Hello, and welcome. I am so glad you're here. My name is April Schoen and I'm sitting here today with John Curry. 

John Curry: Hello, April. Hello, everyone. 

April Schoen: Yes, and welcome. Welcome. Now listen, I'm gonna give us just a few minutes. So everyone can get logged in because we're right here at the top of the hour. But let me just tell you first a little bit about what we're going to talk about. We're going to be talking about how do you manage your finances during a financial crisis, or a financial storm? 

I know that John and I have been getting so many questions from clients over the last few months about just where are we today? Thinking about this economic landscape. Are we in a recession? Is this recession coming our way? What's going to happen with inflation and interest rates and the stock market and all the geopolitical risk? So there's just a ton of concerns out there. 

And we thought it'd be good to have this new call, webinar for today to go through what we think are some great things for you to focus on. I want you to think about controlling what you can control. And we're going to talk through some key action items about what are some things that you can really be focused in on to make sure that you are managing your finances well, if there is some type of crisis, and how do you prepare for that?

John: Speaking of prepare, I like the concept of prepare so you don't have to panic. Because it's too easy to just drift along and listen to the news. And listen to the naysayers and the talking heads and say there's nothing I can do about it. That's just not true. We know that. I've been doing this for 49 years now. You can do something, you can prepare. And even for things that are not on your horizon. Because if you prepare and not panic, you'll be able to weather the storm, so to speak.

April: That's right. And so I also want to take a minute and just congratulate you on taking time out of your calendar, your busy day to listen to this. I think it's really important that you're doing this, that you're being proactive. And I just want to acknowledge you for that. 

John: That's part of preparing.

April: That's part of preparing. That's right, it's being proactive about these kinds of things. Learning and getting out there and figuring out what you need to do next. You know, there is a lot of financial uncertainty out in the world. And it seems like, at least for me, since COVID, it feels like it's been pretty constant. And I think that there's this need to have resiliency when it comes to our money and our personal finances. 

And I think it's actually more important today than ever. And so today, we're gonna talk about that. We're gonna talk about how do you work towards having financial stability. How do you work towards having financial security? So we're excited to go through this new topic with you guys today, weathering the storm. How do you manage your finances during a crisis? 

And we understand there are many challenges that you may be facing today. And not all of them are the same. And we're committed to helping you and providing you with some practical insights and strategies. Not only, let's be honest, we don't want to just weather the storm. We want to come out stronger, better, more resilient. It's not just how do we get through this, but it's how do we actually become stronger through it?

John: Correct. Reminds me of a story about the buffalo and the cow in the plains. Storm comes in, what does the cow do? Runs away from it, trying to avoid it and getting beat up a lot. Buffalo says, nah, I've had enough of this, they charge right through it. They get beat up in the face, shake their head, they go through in moments, a few minutes, because they were willing to deal with it head on.

April: That's right. It's how we want to be. We don't want to just get through it. I want to come out better than I was before. 

John: Gooder. 

April: Gooder.

John: I don't know if you can tell folks. We always enjoy doing these. We do them to help educate you. But I'm gonna be honest with you. We're sitting here together, the energy just flows. And it's just fun. We love what we do. And we're very fortunate and blessed that we get to work with people we love working with and it's just fun.

April: It's fun. It absolutely is. So today, here's what we're going to talk about. We're gonna talk about some essential elements of financial resilience, from how do you figure out when a financial crisis is about to come? What are some of those early warning signs that you may see? We're going to talk about how do you prepare for those? How do you protect your investments and how do you create a comprehensive financial plan? 

So as we dive into this, our goal is to empower you with information, but not just information, but also some actionable steps. Some action items, so that you can really face whatever comes your way. And John, as we're going through this, I think, actually, I'm gonna change tactics. Before we get into it, I just want to make sure everybody knows a little bit about who we are. 

John: You're trying to throw me a curve ball. 

April: Always.

John: I already know, folks. It's coming up on the slides that she's gonna throw at me. I know it's coming.

April: It's what I'm good at. Let me tell you a little bit about us what we do and how we help our clients. So John and I, we typically help people who are getting ready to retire. And usually I find that to be one, in the few years out from retirement, and many of them are members of the Florida Retirement System. But we also work with business owners and people in the private sector as well. And we really just found that those clients, they have a lot of the same questions and concerns. 

So when we first meet with them, they may be a little stressed, or worried, or anxious about, hey, what's this really going to look like for me, as I step into retirement? What's my income gonna look like? Can I really retire and not have to go back to work in some capacity, if that's what they want to do? And they also have a lot of decisions to make. And these are really big decisions. 

Like when to take Social Security, and what pension options should they take? Or did they take the right pension option? What to do with their retirement accounts? How do they handle taxes and required minimum distributions and Medicare? There's all of these aspects that come into play when you're getting ready to retire. And they're really big decisions that are going to impact the rest of their lives. And they want to make sure they're making the right ones.

John: Speaking of that, with Medicare, today's the last day to make any changes on Medicare. And I know everyone that's listening to this has gotten bombarded as I have with either phone calls, postcards or letters or something. Can't turn the television on without seeing some ad about Medicare.

April: Yeah, and even just that one topic is very complicated. And there's lots of different options, right. So you really have to kind of weigh all those.

John: Yes, we spend a lot of time with clients on that. A lot.

April: And so our job is really to help clients quiet down the noise, and help them have priorities so that they can prioritize what's most important to them, and really figure out so they have a plan, they have a system, and they know what's working and what needs to be tweaked. And they also know exactly what they need to do to get ready. I was just meeting with a client earlier this week and showing them what we call a retirement rehearsal. 

So where we go through and do a retirement baseline and say, okay, based on what we know, today, this is about what things are gonna look like for you when you get into retirement. And then I said, here's where we are today, but how do we make it better? So how do we tweak it? How do we improve it? How do we optimize it? And that's a lot of what we do. And then we love having our podcast, and webinars and seminars, and get as much information out there into the world to help you when it comes to these topics. 

So let's get into today's. So here's what we're gonna go through is how to understand this financial crisis, what is a financial crisis? How to build financial resiliency? And then what are the keys to a secure financial plan? Okay, so I'd love to ask you guys, how many of you would want those things, right? How many of you want to feel more confident, when it comes to your money? Feel more secure? Feel like you have a plan that you know exactly what to do, and then what you need to do? 

Well, that's great, because in the next 45 minutes or so, the time we have left, we're gonna be going through all of those things. You're gonna know exactly how it applies to you. You're gonna know exactly what you need to do to get that done. And I think you're gonna find this information very relevant and valuable. Now, we do not have enough time. We always say this, we don't have enough time to get all the information out of my head and all the information in John's head. 

So what we're going to do is we're going to save some time at the end so that we can talk to you about how do you customize it for you, so you can create this plan that's more personalized. But we're going to wait and we'll save that for the end of our talk. But don't stop listening. We've got some really good stuff. And we're, that's right, we're gonna get some really good stuff today. And here's why this is so important. 

The decisions you make will determine your destiny. I want you to write that down. The decisions you make will determine your destiny. And many people make these decisions based on feelings. And what we want is we want you to make decisions based on facts. Based on knowing all your options, so that you can make the best decisions for you. We can help guide you through some of that, too. 

So let's first talk about what is a financial crisis, and how do you recognize a financial storm? So a financial crisis is a significant disruption in the normal functioning of a financial system. That sounds like a very technical definition. I'm gonna say it again. I'm gonna say it again. A financial crisis is a significant disruption in the normal functioning of the financial system. Okay, so let's talk about this for a few seconds. 

What types of financial crises or financial storms are out there? You can have economic, you could have social, you can have personal impacts as well. So let's think about some examples because these storms can take different forms. I want you to think about the 2008 global financial crisis. Pretty sure most of us remember that one.

John: Yes. Although a lot of people, because of their behaviors seem to have forgotten a little bit about it.

April: Mm hmm. You know, there was the .com bubble burst. One thing that I think that is often overlooked is we can think about these financial crises, and we do think about them more on a global or economic but what about those personal financial crises? What about if you have some sort of unexpected health concern? Healthcare issue? What if you lose your job? Now that could be both right? That could be something that's more global economic, but it's also nothing going to impact you on a personal level too. 

So you can have economic downturns, you could have job loss, you could have unexpected expenses, you could have forced retirement. So there's a lot of different types of financial storms. And so we need to know how to recognize those, how can we see some early warning signs? And how do we prepare for them? 

So let's talk about how do we recognize some early warning signs, because the earlier that we know about them, the earlier that we can be aware of them, the more that we can be prepared. Now, you know, I do want to say this too. John and I talk about this all the time with clients about how we want your plan to work well when the sun is shining, and when it's not. 

Meaning that ideally, you have a plan already in place of how to deal with some of these things, how to weather these storms, because we all know they're going to happen, right? We're going to have stock market volatility. We're going to have recessions that come and go. There's also going to be some you know, you got to prepare for some of those unexpected life events, because they're going to happen as well. It's life, it's going to happen. 

So we've got to be prepared for them in advance. But let's talk about some of these early warning signs. So on the global economic side, some of those key indicators could be rising unemployment, it could be increasing debt levels, it could be market volatility. You've got inflation, you've got geopolitical risk. I think we could go on and on, but those are definitely some of the key indicators on a more global economic side.

John: We could sit here eight hours and go through all that stuff.

April: And I don't think that you have to, you know, maybe pay attention to it as much as John and I do every day.

John: We're kind of geeks about it, but that's what we do for a living. So we need to be aware and be able to help people in good and bad times.

April: That's right. That's right. So you know, you don't have to, we don't want to be fearful. It's not about living in fear of being worried about it. It's just about being aware, and just know what's happening and what's going on. John, what about on the personal side? Some of those personal financial storms? What would be some key indications for someone that something personally is off track?

John: I want to touch on that a little bit. But the one that hit me the most was when you were talking about health issues, just when, back in 2008, not only did we had the financial crisis, I had triple bypass surgery in July 10th of that year. And then we started seeing the financial calamity towards the end of the year. And I couldn't work for a while. So there were things I couldn't do to help clients. I could help them by telephone but not as many face to face appointments. That popped in my head. 

Then the more recent one was in March of 2021, where I had my right leg amputated above the knee and I had no clue of all the things that would be impacted with that. And fortunately business was not impacted because you stepped in and took over and ran the business just fine. Incidentally in 2008, we did well, we didn't panic and go out of business like some people did. 

But with the amputation, I had to remodel the house, had to be redone to accommodate a wheelchair. Had a wheelchair ramp sit in the front for a while, because for six months, I used a wheelchair. I didn't get the prosthesis until September of that year. So that's what went through my mind is okay, it's not just things that you see, and you think about. Inflation, we all know there's gonna be inflation, up and down. 

I mean, you gotta live in a cave, not to understand inflation comes in cycles. But those are the things that popped out for me. And some people will know some will not, but my most recent thing is I go in for a scheduled colonoscopy. And then I discovered that I have cancer in my colon and my liver. And it's spread pretty fast to the liver. And we didn't know it. 

So what do you do? Okay, those are all unplanned events. Trust me, I didn't plan to have heart trouble. I sure as hell did not plan to have my leg cut off. And cancer wasn’t exactly a treat either. So I have a choice. I can panic. Or I can do what it takes to prepare for that. And because of the decisions I've made financially over the years, I have zero financial stress. I'm not worried about that. I can take care of health issues, the physical therapy for the leg, go to chemo every three weeks. 

So I'm at peace with that. But I'm telling you right now, April, if I had not done the things that we preach to other people, if I had not followed our own advice, I would probably be freaking out. But thankfully, because I did that, from a standpoint of no debt, low expenses, then I've weathered those storms. Might be a little more information that what you wanted, but that's what was in my head.

April: Yes, it's perfect. And I think some of these, those of you who are listening to this, or wondering well, how do I know, things seem to be doing pretty good. I haven't lost my job. It's pretty secure. What are some early warning signs that I could know, I need to stop and address this? 

So on that side, I think about looking at where you are financially and if you find that you're not saving as much as you used to, right? You've got now increased spending. Could be inflation, or it could be debt. Now you've got also increased debt. So there are a couple of things there that could be some kind of early warning signs too. So reduced savings, increased spending, increased debt.

John: I'm thinking about the gentleman that we met with yesterday, who told us about how much he has procrastinated on things. So I think the number one concern is ourselves. We know we should do something, but we procrastinate. And I shared with him yesterday, and I'm going to share it with everyone now. The three most dangerous words in the English language, in my opinion, are: I know that.

So you may think everything's perfect. And it may be. But what if there's one little thing that's not right, that could make everything fall apart? And what I love about our process, we look at everything. And we tell people, we got to see it all. Something as mundane as your car insurance, home insurance. Why do we care about that? We don't sell that. 

But we care, because if it's not done properly, and you have an accident, you hurt or kill somebody, guess what? All of your financial stuff could be in trouble. And you're talking about a crisis. Now you got one. So I would say, if you're finding yourself saying I know that, I know that. That's an early warning sign that you might want to sit down with us or someone like us and just review everything you've got.

April: Good. So we've talked about how we can see this early warning sign. Let's now talk about how do you prepare for a financial storm? So I want to walk through some key things here. Think about if you were preparing for a hurricane, what would you do? You would have an emergency kit, you would have an evacuation plan, you would evaluate your home insurance, you would secure valuables, you'd seek professional advice, and you'd monitor the situation. 

And I want us to take a few minutes and just compare this about thinking about preparing for a hurricane and preparing for a financial storm because there's so much overlap here. Now here we are in Tallahassee, Florida. And so we are very familiar with preparing for hurricane. 

John: Yes, we are. 

April: I bet most of you listening to this are too. Even earlier this year, there was a pretty big hurricane, a category three that came in very close to where we are. So all of us that week we're doing all of these things. So let's kind of talk through this a little bit. So if we weren't getting ready for a hurricane, we first get our emergency kit together, right? 

So we would have all the essentials. We'd have water and non-perishable food and flashlights and all those things. Well, what about on the financial side? Well, we'd have an emergency fund. An emergency fund is like having that financial kit. It gives you a cushion, right to cover those unexpected expenses, medical bills, car repair, sudden job loss.

John: I got to tell you a funny thing. I was, in preparation of this last hurricane, I was at Publix. This guy had his shopping cart full of beer. I said, got a party? He said, hell no man, I'm getting prepared for the hurricane. He said I'm stocked up now. So his emergency kit was a whole bunch of beer. He didn't want to run out of beer. I had tears in my eyes, I was laughing so hard.

April: One of the things too, is you're gonna have an evacuation plan. So thinking about, you're going to know if you've got to leave, where are you going to go? How are you going to get there? And that's really one of those key components. So how does that apply on the money side of things? Well, that's having a financial plan, right? That's thinking about outlining what are your income and your expenses and your savings goals and guiding you through those financial decisions to help you navigate some of those. 

So just like having an evacuation plan, you want to have a financial plan. And if you're a homeowner before a hurricane comes, you're going to make sure your home insurance is up to date, right? So home insurance is an interesting thing. We can't wait and let the storm hit, and then call the insurance company and say now I want to get that home insurance policy, homeowners insurance policy. 

Now I want to make changes to my plan. It's something you have to do before the hurricane hits. You know, we also use the other example. You can't call your car insurance agent at the scene of the accident and say, hey, I just got into an accident, can I increase my limits? They're not gonna let you do that. 

So there's some things in your financial plan that you have to do before you have a problem, before you have an issue. What are some of those things? Some of that is protecting your investments, it's also other protection vehicles. That could be life insurance. That could be making sure you've got plans to help you if you get sick or you get hurt. These are all things you have to have in plan beforehand, before you need them. 

Another thing would be like securing valuables. What I think of here is like having that go bag, you know, you've got this bag or box or you know you've got your thing ready to go that's going to have like your documents and your valuables and all of those things. So funny story, John about that. With this last hurricane, I was talking to the boys about that, because we were talking about where's the hurricane gonna go? And if it came closer here, we probably would have left. 

So they were all going, what will we do with all of our things? And I was like, well, you know, we're gonna go in the car and we'll pack a bag and we'll take both vehicles, we're gonna take the dog. And so we'll just want to take some things with us that are valuable, that we want to take with us to safeguard. And so Connor who is seven is like, so we're going to put the TV and the back of the car? And I laughed. I was like, probably not the TV buddy.

John: I thought you were gonna say favorite toys or something.

April: Oh no. He was like, well, maybe that is his favorite thing. He was like, convinced that we were gonna put the TV in the back of the 4 Runner. And I was like, no, no, that's not what I'm talking about here. So on the financial side, when we're thinking about securing valuables, really, this is thinking about your future. We want to think about are we on the right track when it comes to retirement. 

We want to understand our options on the investment side so that we can secure that future for the future, right? And then seeking professional advice. If there's a hurricane coming, right? I don't know about you, but you're watching the news. You're pulling up, I've got you know, I listened to one of the local news guys, I always follow his like Facebook feed, I'm looking up alerts online. 

So you're getting that professional advice so that you know what's happening. It's the same thing with your finances. You want to have professional financial advice. You want to have a network. You want to have people advisors that you can go to to get advice for your specific situation. 

Okay, so I really recommend that if you don't have someone already, find someone that you know, like, and trust that can help you with that. It could be us, someone on our team, but it doesn't have to be us. Just make sure that you've got someone that's helping you through that.

John: As you're talking about this, I'm thinking about a friend of mine who lives in New Orleans. When Hurricane Katrina came through, he lost his home. He lost his business building. They had to move away. And September of that year, I was in New York City for a group meeting. There were 30 of us there. And it's when Bob enrolled in the living balance sheet. Announced it. I was the second person to sign up. 

Because this gentleman, Rick, was number one. And he shared with us as a group, he said, guys, if I'd had this, I'd have all of my financial records in place, because it'd be there safe and sound in a digital format. But he lost everything. Had to start over. Actually I think he'd moved to Birmingham for quite a while, worked there and later retired. But I'm thinking about our emergency kit for people and ways to protect their valuables, especially their information is through the planning process we use.

April: Absolutely. 

John: In a lot of ways. Because you can't take everything with you. 

April: No, you cannot, no you cannot.

John: You can't put the big TV in the 4 Runner.

April: No, no not taking that with us. Well, and part of that plan too, we talk about continuous monitoring. It's not just something that you really want to just like, set it and forget it. Just like you would in a storm, you're gonna be getting those weather updates and staying informed about what's happening. I mean, remember when that last hurricane came through, I had my alarm set on my phone to whenever they were going to have the new update to check it to see how the track of that hurricane and where it was. 

So you need to do the same thing with your finances. It's great to get a plan, but we just can't leave it there. We've got to continually look at it and adjust it to make those changes as things change in our lives. So we could spend an entire hour just going through, probably more than that actually, just going through these items about getting prepared for a financial storm. 

So we're not going to have enough time today to go through every single one of these in detail. So we're gonna pick a few of the highlights to go through with you today. But definitely, these are things that we would suggest that you think about when you're getting ready to prepare for that financial storm. 

It's that emergency kit, which would be an emergency fund, it's having a plan, it's reviewing your insurances and your investments, it's securing your valuables for the future, seeking professional advice, and then continuing to monitor your finances. So now we're gonna get into one topic that we talk about a lot with clients. And it is an item that we find that's overlooked a lot. 

So we're gonna go through emergency fund essentials, why is it important? How much should you have in your emergency fund? And where do you keep it? Okay, so an emergency fund is a pool of money that you set aside to cover unexpected expenses or financial disruptions. Okay, let me give you some examples. It could be job loss, it could be a medical emergency, unexpected house repairs. 

Your emergency fund is really there to help you stay afloat, and it's very important that you have one. You know, I was just having a conversation a few weeks ago with someone about how this is something that we find that people overlook is having an emergency fund. And they asked me, well why? Why do people overlook it? And I said, because it's not fun. 

It's not sexy, it's not some investment or some new thing to do. It sounds kind of boring. We're talking about keeping cash on hand and how much to have and where to put it. So it's just not as fun as talking about retirement accounts and investments. The other thing I find is that, you know, until recently, we've really been in a very low interest rate environment. So we've been earning next to nothing on our savings and on our checking. So people didn't want to have a large amount of money, just sitting in checking and savings because of that low interest bearing. 

They wanted it to be working for them and to be working more efficiently and effectively. We call your emergency fund like the moat around your castle. It's really your first line of defense. And we'll kind of get into some of the reasons for that in a few minutes. I'll give you this example, though. Take last year, John, 2022, when the stock market is down 20% and bonds are down 10%.

John: It looked like everything was falling apart.

April: Everything was falling apart.

John: Not to mention the political stuff that was going on. 

April: That's right. 

John: And a war.

April: And a war. So let's say for example, just for conversation, your air conditioner goes out at your house and you need to replace the air conditioner. Okay? Do you want to go to your investments to pull money out when the market is down. Again, think about the market being down, the stock market 20% and bonds down 10%. Do you want to have to go to your investments to take money out of those to replace the A/C.

John: Only if I have to, because once I pull it out, that's a permanent loss. Because that money is not there to come back. I went through that in 1994. May of '94, we bought a house. And the game plan was to use the mutual funds to cover the downpayment and closing costs. Well, mutual funds were in the dump on closing time.

So I used a policy loan on my life insurance policy to cover all that. And then when the mutual funds came back up, I took the money and paid my policy loan back. I could have used other investments, but I didn't do it. But in that case, to me, having the cash value in my policies and the savings that I had in the bank. That's what kept me from having to tap into that account.

April: Absolutely. It's so important, especially thinking about a year, like last year in 2022.

John: Let's think about it this way. What about if there's an opportunity? What if somebody comes to you and says, look, I've got this great business opportunity, or some investment or something, and you don't have the money? What's the opportunity cost on it? Or you get the money but you use say 18 or now 28% credit card, or you go to the bank and borrow money, have to pay it back. So having the emergency fund and opportunity funds is very, very important.

April: Now, let's talk about how much should someone have in their emergency fund. Now, this, I do feel like is more tailored and specific to every individual person. We're gonna give you a rule of thumb. But this is something that you also have to kind of figure out what's a good emergency fund for you. So our rule of thumb, and I really am not a fan of rules of thumb. Because whose thumb are we going to use? Are we going to use my thumb? Are we going to use John's thumb?

John: We'll do a comparison. My thumb is bigger, so I will probably use my rule of thumb if it's going to give me more money.

April: That's right. So I'm not a big fan of those. But just as a guiding principle, we say at least six months of expenses in your emergency fund.

John: Minimum.

April: Minimum, minimum.

John: Preferably a year, but a lot of people say oh, I can't do that. Okay, then do whatever you can. Maybe it's three months. For some people three months is a big number. And I'm not talking about people that are always living paycheck to paycheck. I'm talking about people who they just they are so focused, April, I've got to put everything they can in retirement. 

I've got to max my retirement account. They don't have enough liquidity. And if something bad happens, you mentioned investments, well, it's just as bad taking it out of the retirement account. Because it's not there to grow for your future, which is to give you income. That's what retirement plans are for.

April: Absolutely. So we say at least six months of expenses. But you should calculate that number and then ask the question, do you feel like that gives you enough comfort? Because for some people, depending on the stage of life that they're in, their expenses could be really low, and they say, oh, that's not enough for me to keep on hand in cash. 

So start there, but then evaluate to decide if that's enough or you want to have an extra buffer or an extra cushion. Now, John, let's talk about where should they be keeping this money? That emergency fund, now they know how much to have. Where should they keep it?

John: Well, some people keep it in a sock drawer, bury it in the backyard, put it in a bank account. All the obvious places. Yes.

April: I was gonna say don't put it in the backyard. Don't bury in the backyard.

John: We've got some funny stories about that, but those are for another day.

April: You've got checking accounts, savings accounts, CDs, money markets, cash value life insurance, you've got a lot of different options about where to keep your emergency fund. But what's the worst place to have your emergency fund? Retirement accounts. 

John: Tell them why.

April: Retirement accounts are the worst place for your emergency fund, I think for two reasons. The main reason is taxes. Because if you have a traditional retirement account, every dollar that comes out is going to be taxed at your highest marginal rate.

John: And also possible penalties if you take it out early.

April: If you're under age 59 and a half, you're gonna have a penalty on top of the tax. And then we just mentioned earlier about the investment. So if it's invested, I think either way it goes right. If it's an investment that's working for you, and it's growing, you don't want to take money out of it then because you want to let it continue to grow.

Or if it's down, you don't want to take it out then because now you've locked in your losses. And your account has to work even harder to get back to where it was. So definitely evaluate how much you should have in an emergency fund and then have a place that you can get to it where it's liquid and it's easy to access and you don't have to worry about market volatility. 

Another key component we talk about with clients is having a spending plan. So we're going to talk about having a spending plan versus a budget, prioritizing essential expenses and discretionary expenses. So this is when we're gonna start to get into maybe some more of the strategic options for you, is thinking about having a spending plan.

Now, I do not like the term budget. To me a budget is a dirty word, it feels kind of like a diet. Budget to me is very restrictive. I don't think budgets work to be honest with you. Because just like a diet, what the main problem with budgets is that people make them too restrictive. They don't give themselves enough wiggle room, they don't leave room for the fun things, things that they want, things that they know are gonna happen.

A budget is way too restrictive. So a spending plan, when we talk about having a spending plan with clients, it's more about just being intentional with your money. It's two things. I think it's being intentional, so that you're making the decision about where is your money going. And that you also know where your money is going. You have to know your money to grow your money. 

I do find most people do not know they don't have a spending plan, they don't have a budget. And it doesn't matter if someone is retired or someone is in their 30s and 40s. Most clients that we meet with aren't really sure how much money they're spending. They tell me that they don't know where it all goes, that it feels like their money comes in the front door and goes out the back door just as quick. 

And they don't know where it's all going. So one of the first things we recommend is that we figure that out. So it's easy. You can take a look at how you've spent your money. The first thing I say is don't judge it. You just look at where have you spent your money in the last three months. Make no judgments. Here's where it is, these are the facts. 

This is where my money went the last three months. So first look at that. And then you can evaluate it and just ask the question, is this how I want to be spending my money? If it is great, but you might look at it and see some adjustments. Most people we work with find some adjustments. I had this conversation with my husband years ago. 

I remember we were sitting in the kitchen and we were going through our spending plan. Now I have to admit that I used to make my husband sit down with me quarterly to go through this. I'm sure he loved it. I'm sure it was just his favorite thing to do is sit down quarterly with me and look at these numbers. 

John: Wrong.

April: But I asked the questions like what do we want to do with our money? Do we want to just haphazardly going to like Amazon and Target? Or do we want to be more intentional? Do we want to focus more on building our future? Do we want to focus more on giving and making an impact in the community? Well, the obvious answer is that we wanted to be more intentional. But if we're not, then our money's just gonna go somewhere if we're not telling it where to go. So that's the idea behind the spending plan is to be intentional about it.

John: For a long time, I had this cartoon on my refrigerator door. It said, it showed this couple around the kitchen table. The caption says money talks and ours is saying goodbye. I've got to find that again.

April: That's good. And you know, I want to be clear on something too, here. This isn't about not spending your money. If you've been around John and I long enough, you know that we're a big proponent of you enjoying your life. I don't want you to wait forever. I don't want it to always be this what if money, and I can't take money, and I can't spend money because of this, this, add this? 

No, no. I want you to enjoy your money. I just want us to have a plan for that. So whatever that looks like for you. Does that mean that we still need to be saving for the future? Great. Are we already in retirement, then let's structure it where you can spend and enjoy that money.

John: And, the key phrase here is it's guilt free spending. 

April: Guilt free. 

John: Because whatever you have set aside for those things. It should be guilt free. And how many times have we talked with someone who they tell us about these great plans and they never do them. They never do them. Sometimes things change and you should do them. But I'm thinking of our friend who every year, every year talked about taking this trip, and then he gets sick and could do it. And I'm an example of that. How many times I've talked about going to England, Scotland, Ireland. 

The likelihood of me putting my butt in the position now to do all that now is very slim. Well, maybe, but not likely. It's a hassle when everything's working just fine. Much less when you got a prosthesis dragging around. I say dragging around, I'm not dragging it around. I get around just fine folks, but you get my point. But the guilt free spending that whatever you set aside, you can go enjoy it.

April: That's right. I'll wrap this up here and just say when we look at this, one of things you can look at is we recommend clients do this, especially thinking about retirement planning. Is if you've got your spending plan, then you can say what part of this is essential expenses? And then what part is discretionary? And it's just good to know. I'm not saying you make any decisions about that. 

But just having an idea about what's essential, and what's discretionary. We actually use that information in our planning for retirement. So we talked about looking at what are your guaranteed streams of income, and making sure you've got enough guaranteed streams of income to cover those essential expenses, and then having other buckets on your balance sheet for discretionary spending. 

So I think it's great information to know. Let's get into talking about protecting investments and retirement accounts. I think that, especially given the landscape where we are thinking about coming off of last year in 2022. And then you know, 2023, we're going to end this year, and the market will be up and it'll look like a pretty good year from a market return standpoint. But boy, was it bumpy? And boy, was it volatile.

John: And we're not done yet. We've still got a few more days that's going to be volatile up and down.

April: So as we're going through this, we're going to talk about how diversification is key. We're going to talk about staying the course versus strategic changes, assessing your current trajectory, knowing when to make changes, and then the importance of professional guidance. So this first point here about diversification. Now, I know you guys have been hearing this for years and years and years about how important diversification is.

John: All of your adult life.

April: All of your adult life. We all hear it right, about how you have to diversify your investment portfolio. So let me kind of give you this as an example. It's like having a well balanced ship. Okay, it can help you in various economic conditions without putting all your eggs in one basket. And so the question is, are your investments diversified enough to handle these changing tides in the market?

So we will commonly do an investment analysis where we take a look and we peel back all the layers of the onion of how are you currently positioned and ask the question, is this working or are some tweaks needed? And John how many times have we had people say, man, I've never had anyone show me what you just showed me.

John: Dozens of times, if not hundreds. They just never think about. And they think they're diversified. They've got five different mutual funds. You look at the top 10 holdings, and they're almost identical, all five funds. That's not being diversified.

April: It's not. tThere's too much overlap. And that's one of the things that we look at. We look for red flags, were trained to look for red flags. What could be getting in your way. And so staying the course or strategic changes. So when we've got market volatility, again, we've heard this all before too, that this, you know, age old advice of stay the course just stay the course. 

However, I think it's important that you assess, are you on the right course. Are you confident that your current investment strategy aligns with your goals? Or I'll get a little more technical, I guess is that does it align with your risk tolerance? How many times do we find people are taking on way too much risk than they need to be taking on? 

I was talking to a client last week, and he's 70. So he's going to be taking his required minimum distributions in three years. And his IRA is 95% in stocks and 5% in cash. It's a little too risky for where he needs to be at this stage in his life. Because he's gonna have to start taking money out of that. And actually, it's probably, it's a little bit less than three years.

John: But so, okay, so what would you say to that type of person who says yes, but I feel like I'm so far behind because I didn't do enough in the early days. So I'm willing to take that risk.

April: Yeah, I think it's a great point. But we just don't want you to take that risk with this part. 

John: With all of it.

April: With all of it and with this part. So for him it wasn't necessary making these huge big changes, but actually goes back to a little bit of that liquidity and this discussion around where are we going to access and take cash from. But it's about getting this plan for his required minimum distributions. Where are we going to take your income from? Because this has worked great for you while you've been working and you're growing your money, but it's gonna feel pretty painful when we start taking the money out. And he's gonna have to. He doesn't have a choice.

John: Well, and you're going to have some of those years when he takes that money and it's a down market. That's just the way life is. It's not up every year.

April: Absolutely. And it's okay to take risks. But can we do it in a way where we level it out? And it's not so up and down and up and down and up and down? So part of that is taking a closer look at your trajectory and are you on track to meet your goals? Is your investment structured to handle some of this, I'm going to call them unexpected financial storms. But we know the market is going to be up and down. We know there's gonna be market volatility. So we have to plan around that.

John: We just don't know when it's gonna happen. But we know it's coming.

April: So these strategic changes, they shouldn't just be arbitrary. We need to know when we need to make these changes. So, have there been significant life changes? Market shifts? Have there been adjustments to your plan? Like the example I just gave someone was working and saving for retirement. And well now we're getting really close to that. So we need to have a plan for as they're getting ready to retire, we actually call that the retirement redzone. 

Where the five years before you retire, and the five years after are the most important part of your plan. And then that's when you really want to have professional guidance. You don't want to just do this on your own, you want to make sure that you're working with someone that can help you go through this. So let's talk about the keys to having a secure financial plan. 

You want to have a plan for all seasons. We want to talk about the role of professional guidance. You want to stress test your plan. You want to have continuous improvement and tweaking and then you want to prepare for life's unexpected events. A good financial plan is like a reliable map for your financial journey. It's not just knowing the route when times are good, but having a clear plan for navigating through those storms as well. 

So do you have a road map that covers both the sunny days and the rainy ones? And working with that financial professional is kind of like having that navigator by your side. They bring expertise and experience and really some understanding of those financial landscapes. So again it doesn't have to be us. But just make sure that you have someone that you're working with. 

And we talk about this all the time, let's stress test your financial plan. It's like preparing for that storm, before it even arrives. And you're going to need continuous improvement and tweaking. It's not just a static document, right? It's a living, evolving strategy. So your plan should be tweaked, it should be refined. 

So you got to make sure that you have a plan for when you're doing that and how you're doing that. And life is, we all know this. Life is very unpredictable. So we've got to have a plan that's proactive and that can prepare you for that. So whether there's a sudden windfall, or there's an unforeseen crisis, a well crafted plan makes sure that you're ready for whatever comes your way. 

Good and bad. We kind of been focused a little bit more on the bad stuff today. But also good things happen in life, right? So today we've kind of gone through and talked about understanding financial crises, and how to build financial resilience. And also, what are those keys to a secure financial plan?

John: I've got something that just popped in my head. I'm going to be careful I don't use a name here. But a positive one. How about the fact that all of a sudden, your child or grandchild is accepted into a major university? And I'm thinking of people that we know who robbed their retirement accounts in order to fund college for a child or grandchild.

Some the stories came out good, some not so good. But that's another example of okay, something good happened. This child was accepted. Had no expectation of that. How do you pay for it? How do you pay for it?

April: It's a good thing to happen. You know, you gotta have a plan for both of those things. Yeah, absolutely. So as we've talked through these things today, you may be wondering, okay, what's next? What are the actual steps that I need to take to get there? So this is an area in which we can help you. 

So one of the recommendations we would make is for you to schedule a time for a focus session. And here's what you're gonna get on this call. So these calls are 30 minutes. And what we want to go through on that is we want to get clear on what your goals and concerns are. We want to get clarity on any opportunities that may be available to you. 

What roadblocks could be in your way? And usually, even in like a 30 minute call, usually, we'll have a couple of tweaks that we can share with you. Just yesterday, we met with someone new and by the time he walked out the door, I think we had a list of probably, I don't know, maybe at least four or five things, tactical things, that we needed to work on together.

John: Did you take a look at the whole list? It was over 12. Because there was a whole bunch of things that were important to him. It's almost like, what about this? What about this? What about this? And you can't in one initial meeting, but you can start determining what the priorities are. What are you worried about? Or as you asked him, what are your biggest money concerns? And then start mapping it out once we have all the data?

April: That's right. So a meeting like this, or a call like this is great for you if you're motivated, you're an action taker, you're open to new ideas, you're willing to learn. John and I love working with people who are motivated and action takers. We work really well with people like that, because it's very similar to our own personalities. 

But this call is not for you if you're not motivated, you're not willing to learn, or you're just looking for some unpaid consulting. So let me walk through and talk about the best way for you to schedule one of these calls. If you've got your cell phone, you can pull out your phone's camera, and on the screen is a QR code. 

So you can pull out your camera and scan it over the QR code, and that's going to take you right to the website to book a call. Okay. You can also call our main office at 850-562-3000. And just let Luke or Leslie know that you were on the webinar, and you wanted to book your focus session. But we're getting fancy over here with our technology, with our QR code. 

John: Some of us are getting fancy.

April: So yes, we're trying it out, folks, we are trying it out. So you can again, get your phone, get the camera app out, hover over the QR code, and it's going to take you right to the page to book a call on my calendar. 

John: Right to the dinosaur in the middle.

April: That's right. I left him on there. My son Connor loves dinosaurs. So a little tribute to him. So I suggest that you do this while you're thinking about it. Because we all have the best intentions. We all get super busy and forget to do things. And so there's really a cost to waiting. So what are those costs? Well, if we wait, we're not going to have clarity, we're not going to have direction, we may not reach our goals on time. 

And when we're talking about building wealth, and when it comes to your money. You guys all know this. Time is such a precious asset when it comes to that. Now, sometimes when people are going through this or talking with us, they might have some obstacles and things they say we're not ready yet to book this call. And here's some things that sometimes I hear. Could be I already have an advisor. And that's wonderful. If you already have an advisor, I'm so glad that you do.

John: Most everybody we meet has an advisor. 

April: Most of our clients do. 

John: Sometimes they have two or three, and they're frustrated, because they get conflicting information. 

April: Like the person yesterday, right? And our goal is to not disrupt what you already have. But it's more about how can we add value. And sometimes there can be emotional barriers. You know, maybe we don't want to face the financial situation, maybe we're worried about what might reveal or sometimes we're embarrassed. So just know, you know, we're here to support and guide you. Honestly, I want to get a sign that says judgment free zone. Because we have seen it all. There's nothing that you could come in and tell me that would shock me at this point.

John: I'm thinking about the TV show Dragnet that a lot of people will remember. Sergeant Joe Friday, he would ask for just the facts, just the facts. Because people would go off on a tangent. Just the facts. And then let's work with the facts.

April: That's right. I'm saying that medical doctor, where there's just not, we can look at that information, almost like we call it out in our system like a financial MRI. There's no judgment there with what the situation is.

John: And once you get all the facts down and properly organized, then you can come back and be judgmental about it. This isn't working. It's a fact. It's not working. So what do we do with it? Do you stay on the same track or do you make a change? If it is not working, that's a fact. If it's working great, that's a fact. Leave it alone.

April: That's right. And then sometimes people are worried about if there's a cost associated with it. So first of all, initial conversations are complimentary, there's no charge for an initial cost. And what our goal is on these calls is to take time to understand your situation. Our goal is to provide you as much value as possible to ideally give you a couple of ideas and some tweaks for you. 

And if we decide to move forward and work together, and listen, that's going to be a decision that we're going to make together. It has to work for you, it has to work for us. And we'll be very transparent, and discuss different pricing options that we have available. Different programs that we have that align with your needs and your goals. 

So the best way to book this call is a couple options. You can call our office at 850-562-3000. That's our main line. So 850-562-3000, just tell Luke and Leslie you heard our call or our talk and you'd like to book a focus session. Or you can use the QR code. Again, use the camera app on your phone and pull up the QR code, it's going to take you right to the calendar to book a call. 

So thank you guys so much for taking the time. I appreciate you guys being on here. And I really just want to commend you again, for taking time out of your day to learn about this. That's really kind of like that first step. And we really enjoyed having the call today and hope to talk to you soon. John, any last remarks?

John: The only thing I must say, I'm going right back to what I said initially, and that is prepare, so you don't panic. Take the time to review everything you've got. Make sure it's doing what you want it to do. And if it's not, then make some changes. Don't make changes until you have a solid plan. How many times yesterday did that gentleman keep saying I want you to do this, do this, do this. He wanted us to take over his money yesterday. And no, no, we're not doing that. Not until we have more facts to know what you're doing.

April: Good stuff. Great. Well, thank you guys so much, and we look forward to seeing you on one of our future calls. Bye now. 

John: Bye bye.

Voiceover: This material is intended for general public use. By providing this content, Park Avenue Securities, LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation or to otherwise act in a fiduciary capacity. If you'd like additional information about our services, you can visit our website at curryschoenfinancial.com or you can call our office at 850-562-3000. Again, that number is 850-562-3000. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with, or endorsed by, Park Avenue Securities, Guardian, or North Florida Financial and opinions stated are their own. April and John are registered representatives and financial advisors of Park Avenue Securities, LLC. Address 3664 Coolidge Court, Tallahassee, Florida. Zip Code 32311. Phone number 850-562-9075. Securities, products, and advisory services offered through Park Avenue Securities, member of FINRA and SIPC. April is a financial representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is a wholly owned subsidiary of Guardian. North Florida Financial is not an affiliate or subsidiary of Park Avenue Securities or Guardian.

2023-166111. Expires January 2026.

The New Year Financial Kickoff

It’s the New Year Financial Kickoff…

In this edition of Ask April, I will help you launch your financial year and set you on a path toward your goals.

I’ll cover:

• Setting your financial aspirations for 2024

• Building this year’s spending plan

• Debt paydown strategies

• Why your investments should align with your dreams

• And more

Mentioned in this episode:

• https://curryschoenfinancial.com

Transcript

April Schoen: Hello, everyone. Welcome to a special episode as we kick off the new year. So Happy New Year. I'm so thrilled and glad that you're here. This is going to be another episode of our Ask April segment of our podcast, the New Year financial kickoff. So before we dive into the exciting stuff, let's take a quick look back and what were some of your key takeaways from our year end review? So at the end of last year, we had a podcast episode thinking about what are some of those things that we should be looking at, at the end of the year, like at the end of your financial checklist. 

And today, we're gonna be talking about kick starting the new year, and kick starting your new financial plan. So let's talk about intentions. So have you ever heard this saying, where focus goes, energy flows? Well, I want you to think about that as we're going into 2024 when it comes to your finances. So where your focus goes, energy flows. And intentions are like our financial GPS, guiding us to what truly matters. They really set the tone for our financial journey.

So I'm going to share with you a little bit about my personal journey, and kind of what my intentions are for this year. And I'd love for you to share with us about what are some of your financial aspirations for 2024. So grab a piece of paper, grab a pen, or your favorite note taking app, and let's take some time to set our financial intentions. I want you to take a few minutes, and I want you to reflect on what is it that you want to achieve this year so that we can make this year as remarkable together as possible. 

Now in the last podcast about the year end checklist, I asked a question and said if you don't know what your goals are, answer this question, and they will help you. So I want to do the same thing. But let's break it down into smaller manageable goals. So here's the question. If we're sitting here together at the end of 2024, and we're looking back over the year, and we're celebrating all the success that you've had in your financial journey, what are those things that we're celebrating? 

So if we fast forwarded and we got to the end of 2024, and you're looking back over the year, what do you feel like will have had to happen for you to feel like it was a successful year, when it comes to your finances? And whatever came up for you just then, I want you to jot those things down. Sometimes what I find is very helpful to do is to do a brain dump and just write down over the next year, what are all the things that I want to accomplish? And I just start writing them all down. On a piece of paper, I have a journal or my notebooks. And I really do I like pen and paper, right? So get it all down. 

What are all those things that you want to accomplish? And then you can go back and look at that list. And you can prioritize it and figure out what's going to be most important to you. So let me give you some examples. What if you wanted to pay down debt. Maybe you've got your student loans or credit cards or car loans, so maybe you want to get that stuff paid off. Maybe you want to make sure that you are saving more this year than you did last year. Maybe you want to be giving more this year than you gave last year. Maybe you're really close to retirement and you're thinking this is the year I need to get my ducks in a row right? I need to make sure my i's are dotted and my t's are crossed. 

I need to have that financial plan for what is life gonna look like for me financially when I step off into retirement. Maybe you want to set up your kids or your grandkids for college. And so you want to talk about education planning. Maybe you want to think about tax planning because man you got hit last year with some unexpected taxes that were due. You want to make sure that doesn't happen again. Whatever that looks like for you, jot it down. And I encourage you to work on that throughout this year. And if you need some help with it, reach out to our office, set up a time for a call so that we can make sure that you've got a good plan going into 2024 and you know exactly what you need to be working on. 

So as we're thinking about these key financial resolutions, let me give you some other ideas. I would highly suggest you start with looking at your budget for 2024. Now, again, I do not like the term budget, I think it's like a dirty four letter word, it kind of reminds me of a diet, it feels very restrictive. So I like the idea of having a spending plan. And why is this so crucial? A well tailored spending plan is kind of like a financial superhero. And it really just helps put you on the right path. 

I meet with so many clients when they first come to me, and we talk about this and I ask if they have a budget or a spending plan. And they tell me, no, they don't. They just kind of spend money. And they don't feel like they have to really restrict themselves too much. But they're not quite sure where their money's going. And if we're not quite sure where our money's going, then we don't really have intentions, we may not have priorities around it. And sometimes there is this feeling of I don't know where it all goes. And feels like money comes in the front door and goes out the back door as quickly. 

Or I have clients who make a good income. And they tell me they feel like they're living paycheck to paycheck. And it's because they don't really have a grasp on where their money's going. So that's where a spending plan comes in. With a spending plan, I want you to be intentional, and really thinking about where is it that you want your money going? And how do you want to spend your money? And when we're thinking about a spending plan, I want to make sure that you're including the fun things. The thing that I see where people make the most mistakes when it comes to a budget or a spending plan is that they make it too restrictive, to where there's no wiggle room. And it's not reality, it's not real life. 

So I'll give you an example. My husband and I like to go golfing together. Now we don't golf all the time. I mean, if we could go once a month, I would be happy with that. You got to remember, we've got two kids that are ages seven and 10. So it's not very often that we get to go out and do that. But we do like golfing. And we actually like golfing as a family, the four of us. So what good does it do for me to create a spending plan that doesn't allow us to do things like go golfing together. Have a date night. Buy clothes for the kids. Save for retirement. Whatever that looks like. 

It's not going to do me any good at all because it's not real life. It's not realistic, there's no way I'm going to stick to it. So it's kind of like having that diet where the diet is so restrictive that you can enjoy food. Then you're like, well, I already blew it, I might as well just throw that diet out the window, because I'm not gonna stick to it. So we gotta make it more realistic. And I'd actually even rather sometimes when I'm talking with clients, and we're talking about saving money, we're talking about paying down debt, again, they've become too aggressive. I can save this amount. I can put this amount towards the debt to get it paid off as fast as possible. 

But if you can't stick to it, then it's actually a demotivator for you. So on some of those things, I'd actually rather us like slow down and take more time to get there if that means that it's more obtainable for you. Now, as we're going through, we're thinking about having this spending plan. The next thing that I want you to do is look at your emergency fund. Your emergency fund is really the unsung hero of your financial stability. It's the moat around your castle, it's your first line of defense in case something happens, where you need to have cashed it to get your hands on it. 

So what we recommend is we recommend that you have six months of expenses readily available in savings. So after you've done your spending plan, and you now know what your monthly expenses are, now you can figure out well how much do I need to have in my emergency fund. It's easy, you need six months of expenses in your emergency fund. So make sure that your emergency fund is fully funded. And if it's not, then I suggest that you make that your first goal. Put that one at the very very tippy top of your list of the things that you're going to accomplish first is going to be having that emergency fund. 

Another thing to think about as we're going into the new year is managing debt. Okay, so debt can be challenging, but you can conquer it. Okay, I help clients figure out debt pay down strategies. So let's make this year, let's make 2024 the year that we get to have that financial freedom by not having debt, right. So put that in a plan, you can have a debt pay down plan. And that could be if you've got student loans, credit cards, car loan debt. We really want to have a plan for how to pay down debt efficiently and effectively. 

One of the areas where I see when it comes to debt, that the mistake that I see most often is people are trying to pay down everything at once. So let me give you some examples. I met with a client recently, and they had a car loan, they had a personal loan for some repairs at the house, and they had some credit cards. So they kind of have like three different categories of debt. And they didn't feel like they're making a lot of progress, because what they were doing is they're paying extra on every single one. 

So let's imagine they've got like four different debts. The car, the personal loan, and two credit cards, and they're paying extra on every single one of those to try to get them paid off. And so we talked through it. I said it's actually a more efficient way for them to accomplish these goals, their goals, is actually just tackle one at a time. So pick one, and put every spare penny that you can towards that loan to get it paid off. And then when you move on to the next debt, you take the minimum payment from the one that you just paid off, and you add that to the next one. And that's what we call the debt snowball. 

So when I look at debt pay down strategies for clients, what we want to look at is we want to rank our debt by both balances and interest rates. And sometimes it makes the most sense to tackle the debt that has the smallest balance, so we can get it paid off as quick as possible. Sometimes it makes more sense to attack the one that has the largest interest rate, because it's harder to pay that one off, because it has a higher interest rate. So you know, I suggest you just look at it from those two angles, balances and interest rates to determine which one should you pay off first. 

The next thing you want to do is you want to make sure that you're investing for your goals. I want you think back about what we talked about setting intentions for the year, and setting goals for the year for our future, and let's make sure that we're saving for that. Your investments should align with your dreams. Your investments should align with your short term goals and your long term goals so that your money is actually working for you. I'm a big believer and having a bucket strategy. Meaning that we have different buckets for different purposes. 

So we've got those short term goals, those intermediate goals, those long term goals, and we've got different accounts set up for different reasons. And those are invested according to those goals. So your emergency fund, guess what, you don't want to have that invested. Don't invest your emergency fund. You want to have that be in cash and cash equivalents. That's like your short term reserves. If we have more intermediate funds, thinking about something that we've got that we want to, we may need it to tap into three, five years from now, we'll then have it invested appropriately for that goal. 

The same thing for retirement funds. Thinking about something that's long term. If something's 20 years away, then we want to be invested properly for that. I met with some clients recently in their 40s and we went through and looking at their investments, and they had too much of their retirement accounts in cash. Especially considering their ages and their time horizon. So make sure that your investments are aligned properly. The opposite could also be true. If you're a few years from retirement, then you want to make sure that you're not invested too aggressively. 

If you're a few years, if you're five years from retirement, you're in what we call the retirement redzone, which is the five years before retirement and the five years after retirement. And those 10 years are the most crucial when it comes to your investments. So you don't want to make a mistake with that. You want to make sure that they're invested properly for you. And again, this is when we want to review and adjust our goals, because goals can change, and that's perfectly fine. So let's take a look at those goals that we've set out for ourselves and decide if they're still the goals that we really want to achieve. 

So what are some big goals for you? Is it that you want to make sure that you're making the right decisions with your money? Maybe you've never worked with someone to have a financial plan. And you're like, gosh, April, I got a lot going on, and I just don't know where to start. Well, then my recommendation would be that we need a financial plan, we need to figure out what are those goals that you have? What are your opportunities, what challenges are in your way? We need a roadmap, right? 

So if we know where we're going in the future, because we know what our goals are, and then we know where we are today, are those two things in alignment? So you need a financial plan that's going to help you achieve these goals. And just know it's going to change. And that's okay. But let's go ahead and get a baseline for you so that it's easier to make those adjustments. One of my clients recently was planning, when I first met with her, she was planning to retire in 2025. That's a little less than two years from now. So we're putting in this plan for her to retire in June of 2025. 

Well, when we met recently, she's decided she wants to work a few more years and would rather retire in 2027, or 2028. And if you are in this, if you're in the state of Florida retirement plan, this client was in the DROP program. And the state of Florida just made changes in 2023, where you could extend your DROP from five years to eight. And this is something that we looked at together with her to say, hey, does this make sense for her to do? Should she still retire in 2025 or should she extend her job for this now the full eight years, and retire in 2028. 

So things change. But let's go ahead and get a baseline so that you can make those changes and those adjustments as needed. Now, the new year might bring with it its own set of challenges. So let's acknowledge them. Whether it's unexpected expenses, changes in income, there are definitely some challenges that can arise. But you know what, let's tackle them head on. One of the mistakes I see people make is that we don't address them. 

That we're too fearful of what the numbers may say. And what they may show us. Maybe they show that we're too far behind. Maybe they show us that we're not ready to retire yet. Whatever that fear is, it's bubbling up for you. But isn't it better to take a look at it? Isn't it better to shine some light on it and to know where you are today, to know what adjustments, what tweaks are needed to help get you there faster? Isn't it better that we just tackle that head on instead of just putting our head in the sand?

Challenges can also be opportunities in disguise, right? So when we're thinking about overcoming these financial hurdles, how do we take these challenges, and how do we turn them into stepping stones towards your goals? Sometimes we've gotta regroup. And that's okay. Sometimes, like a client of mine, we look at it, we say, hey, you know what, you're actually ahead of schedule. You're not just on track, but you're ahead of schedule to reach your goals. How fun is that? So the problem is, if we don't stop to look at it, we don't know. We don't know if we're behind, if we're on schedule, or if we're ahead of schedule. 

So I would love to hear from you guys. What are your financial intentions? What are your financial goals for the new year? I don't care if it's a big dream, or you feel like it's something small, a small win, we would love to celebrate with you. And let us know as we're going into this new year, are there some specific questions that you want us to tackle? You can send us an email and let us know, or you can send us a message through social media, and let us know if there's a specific question or a topic you'd love for us to tackle in the new year. 

So as we're kind of getting ready to go into 2024, I just want to recap for you some of the things that I recommend that you look at. Let's look at our spending plan for 2024 and make sure that we're in good order there and make sure that we're making any tweaks or adjustments that we need. So we want to look at our spending plan. Then we want to look at is our emergency fund fully funded? If we have debt, we want to have a plan for how to pay that debt down efficiently and effectively. We want to look at our savings plan and our savings goals, we want to make sure that we're investing appropriately for our goals. And we want to review and adjust our goals for not only this year, but also think about in the near term, the near future as well, thinking kind of more about those bigger goals that we may have. 

And these are all just steps towards a brighter financial future. These are just some key things to think about as we're setting up our financial resolutions for the new year. So I'd love for you now to take some of these items that we've discussed, set those intentions, refresh those goals and really get a good game plan for how you're going to tackle those into the new year. And you know, as we wrap up here, just as always, I  want to say thank you for your continued support and being part of this podcast community. And I'm really just wishing you guys a happy new year. And here's to a year of happiness and health, and a prosperous new year for each and every one of you.

Voiceover: This material is intended for general public use. By providing this content, Park Avenue Securities, LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation or to otherwise act in a fiduciary capacity. If you'd like additional information about our services, you can visit our website at curryschoenfinancial.com. Or you can call our office at 850-562-3000. Again, that number is 850-562-3000. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities, Guardian, or North Florida Financial and opinions stated are their own. April and John are registered representatives and financial advisors of Park Avenue Securities, LLC. Address 3664 Coolidge Court, Tallahassee, Florida. Zip code 32311. Phone number 850-562-9075. Securities, products, and advisory services offered through Park Avenue Securities, member of FINRA and SIPC. April is a financial representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is a wholly owned subsidiary of Guardian. North Florida Financial is not an affiliate or subsidiary of Park Avenue Securities or Guardian.

2023-165319. Expires January 2026.