Dec. 18, 2024

Optimizing Your Social Security-Integration w/Retirement Assets

Optimizing Your Social Security-Integration w/Retirement Assets

Maximize your retirement income by coordinating your IRA with your Social Security benefit. Retirement income planning is important to understand how much risk you should take, what about tax planning, what about protecting your assets and is Social...

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Maximize your retirement income by coordinating your IRA with your Social Security benefit. Retirement income planning is important to understand how much risk you should take, what about tax planning, what about protecting your assets and is Social Security going to be there? How do you find a trusted advisor and when should you start your Social Security benefit?

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WEBVTT

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The topics and opinions expressed in the following show are

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solely those of the hosts and their guests and not

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those of W FOURCY Radio. It's employees are affiliates. We

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make no recommendations or endorsements for radio show programs, services,

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liability explicitor implies shall be extended to W FOURCY Radio

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or it's employees are affiliates. Any questions or comments should

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be directed to those show hosts. Thank you for choosing

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W FOURCY Radio.

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Welcome to to Ask Good Questions podcasts, broadcasting live every Wednesday,

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six pm Eastern Time on W four CY Radio at

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w fourcy dot com. This week and every week, we

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will reach for a higher purpose in money and life,

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as well as a focus on health and wellness. Now,

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let's join your hosts, Banita Bell Anderson as together we

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start with Asking Good Questions.

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Hello, and welcome to Asking Good Questions. This week we

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are doing part two of optimizing your Social Security. We

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are going to be talking about how you coordinate social

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Security with the rest of your retirement assets. Now, if

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you didn't get a chance to see the first part

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of this, it was last week and you can go

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back and find the part one of optimizing your social security.

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But for now, let's get going and I am going

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to start sharing some screens. So here we are just

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a little bit on me. And you know, since I

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am fairly new to podcasting, I am a snowbird. I'm

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in the western part of the United States. I'm a

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financial advisor, I'm an author, I'm a podcaster. I'm a fiduciary,

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fiduciary and an investor coach because of grandchildren. I have

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an office in Washington State and the Great State of

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Washington that is in the Pacific Northwest, and then in

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the winters, we are in Saint George, Utah, which is

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high desert, red rock, beautiful country. So if you need

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more information about me, you can find that on the

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website called Ask Good Questions podcast dot com. All right,

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so optimizing your soil security? What should you do? So

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you know what you should do. So this discussion, as

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I said, started last week. Today, we're going to discuss

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how you coordinate this government benefit program with the rest

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of what you have saved your whole life. Right, So,

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just before we get started, because I'm a financial advisor,

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got a little discolo closure. You got to remember that

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I am These are my opinions. This is an educational

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program and it's not endorsed or approved by the Social

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Security Administration or any federal government agency. It's hypothetical with

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the big picture ideas to educate you. I am licensed

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through a firm called Tencap, and so all of that

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information is here if you need to look any of

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that up. All right, So we're going to continue this discussion.

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Reserve your content unique to your situation for your complementary

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strategy session on zoom that I provide that link and

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other downloads for course materials can be found on the

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website Ask Good Questions podcast dot com. All right, so

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just realize that I am off for that if you

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want to get some questions answered. So, how in the

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heck do you put all of this together? What should

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you do to make sure that you are doing the

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right thing for yourself? So look at this question. How

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long do you need to plan for a retirement? Right? Well,

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this is out of Wharton. Wharton has done a lot

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of studies and data. If you are male and you're

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healthy at sixty five, you have a twenty five percent

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chance of living beyond ninety two years old. Now, no surprise,

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if you're female, you have a fifty percent chance of

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living beyond eighty nine and a twenty five percent chance

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of living beyond ninety four. Well, what if you're a

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couple and you're both healthy at age sixty five? So

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fifty percent chance of least one of you living past

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ninety two. And are you thinking now of some people

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that maybe you've seen in the news or that you know,

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there's a twenty five percent chance at least one of

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you is going to live beyond ninety seven. And get this,

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there's a one in ten chance that at least one

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of you is going to live beyond one hundred. We

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all know we have seen so and so is having

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their hundredth birthday. That is happening more and more and more.

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And the sobering thing about these statistics and this data

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is that we need to plan for a relatively long

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now it should be exciting period of your life. Okay.

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What I see though, and what the data shows, is

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that way too many people cut this benefit short and

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take it early before their full retirement age, which for

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most of you is probably sixty seven. This is a

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super common and very expensive mistake. And I'm going to

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show you why you do not want to penalize yourself.

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You want to give yourself what's called delayed credits. So

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I'm going to give you some good examples why you

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should do that. Now, one of the things that we

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do when you do your call with well, if we

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get past that call and decide to work together and

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decide to get some things going, we'll do an analysis

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of what are the choices, what are the best choices

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for you? So this is just a slide of something

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that can analyze your particular situation and give you the

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data for what is the most intelligent way for you

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to approach SO security. Okay, And another thing that is

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going to be very in front of you is going

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to be that most of the time you're going to

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be paying taxes on probably eighty five percent of your

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soial security benefit. Now, I'm sure you like and you

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and me and all the rest of us have heard

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that they may be thinking about taking taxes out of being,

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you know, having to pay taxes on SoC security benefits.

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That would be great if they can figure out how

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to do that, you know, in a correct way. But

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right now, don't plan on it plan on having to

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pay taxes on your Social Security benefit. Okay, let's talk

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a little bit. We went into this a little bit

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last week. Let's talk about the future of SOI security

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and kind of what's going on there. This is not

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a four oh one k, this is not an IRA,

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It's an insurance program. And current wage earners out there

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who are being you know, having a little bit of

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Social Security, a little bit of medicare taken out of

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their paycheck. They are supporting those who are receiving benefits

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and retirement right now. That is the truth of the situation.

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Some more truth about this whole thing is that after

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twenty twenty, the Treasury started to redeem the assets that

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are in their trust fund savings accounts to pay for

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the expenditures over the tax income and interest income.

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So that is.

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Something that has been coming for a long time, and

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they're predicting in about ten years that that trust fund

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savings account is going to be completely gone. That doesn't mean,

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hear me, that does not mean Social Security is going away.

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It means that the level of current wageoarners who are

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putting money into the system would be enough to pay

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seventy nine percent of current benefits. We don't know what

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that means. We don't know if it means people coming

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up that doesn't We don't know if it means people

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that are already on Social Security, which are sixty six

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million people. We don't know what that means yet. So

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just realize that the Soial Security Trustees report keeps telling

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us that the total depletion of the savings accounts is

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going to happen, and then the tax income will be

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able to cover about seventy nine percent through twenty eighty nine.

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Let's hope that they get their act together and that

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they find some fixes. Now. I believe there are some

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ways that they can rectrify this situation. They could continue dramatically.

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I think they need to raise payroll TA on high

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income workers, meaning right now it's at one hundred and

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sixty eight thousand in income. I think it's going to

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like one hundred and seventy four or something like that,

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and they should probably just make the top like two

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hundred and fifty thousand, so that everyone who's receiving an

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earned income out there just continues to put into the system.

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I believe another thing that could possibly happen would be

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that they would raise the retirement age. Most people out

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there contemplating Social Security, you're looking at age sixty seven

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as their full retirement age. I'm betting that that might

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be something they look at, is to raise the retirement age.

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And then of course they have formulas for how much

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they figure out how much are going to pay you,

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So revising the formula for future benefits is also very

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much on the table. So here's my financial disclosure statement.

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It's my opinion that adjustments will be made and Social

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Security has a really good chance of remaining solvent for

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many generations to come. I sincerely hope that that is

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very true, because many, many, many people are depending on it. Right. Okay,

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so let's talk about we're talking today about optimizing income. Well,

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there's some dangers you could if you don't optimize your

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so Security income. You could you could spin down your

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IRA too fast. Taxes have to be withheld on all

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IRA withdrawals, and more of your Social Security benefit could

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become taxable. You know, those are all things that could happen.

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So we're going to use Bob and Mary. So there,

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he's sixty three, right now, she's sixty. We're going to

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assume is, so benefits grow at a cost of living

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adjustment of one point five percent per year. This next

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year is two point five percent. That changes every single year.

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Let's say that this couple would love an annual pre

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tax income goal of one hundred thousand dollars a year,

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and they have saved and saved and saved their whole life.

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They have seven hundred and fifty thousand in investable IRA

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assets that they hope will earn six percent that is

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available for them to also use for income. So we're

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going to explore how a shortfall and income can be filled.

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All right, So now remember this is just an example.

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I'm not saying this is exactly how it would happen.

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I'm trying to just enlighten you on some ideas on

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some of the things to consider. So one of the

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things to consider is that you know, people will say, well,

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by taking payments early, you start receiving benefits sooner, but

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it is at a reduced rate. Well, the other side

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will say, well, if I delay, my monthly benefit amount

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will increase up until age seventy. But the longer you wait,

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the fewer monthly checks are going to get. Well, that's

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why we have that analyzer program because we can analyze

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with your data input into the system, we can analyze

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exactly what's the best thing for you. But using the

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information that you know about your health, your family history,

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we can help you determine the right time for you

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to file in order to optimize your benefit based on

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what you expect. Obviously, we don't know what the future

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will bring, but we can say up some likely scenarios

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as well as how you envision your retirement to go right.

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So let's say that Bob starts receiving benefits at age

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sixty three at about eighteen hundred and eighty dollars a month.

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Let's say Mary starts receiving benefits at age sixty two,

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at thirteen oh eight. But look what happens if Bob

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waits seven years, he gets those delayed credits and he

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starts receiving benefits at age seventy. Well, that then is

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three four hundred and ninety three dollars a month. That

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is a huge, huge difference Mary. Maybe Mary only waits

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a year and she starts receiving benefits at age sixty

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three or fourteen twenty four a month. Now I get it.

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Sometimes you don't have a choice. Sometimes you have to start.

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But if you can, if you can work longer, if

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you can get a really good, good idea of what

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is right for you, then you can maximize and optimize

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what you're going to do with this thing. So now

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remember this is just an example. So scenario A is

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if they file early, so they have much smaller SOB

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security benefits. So if they want one hundred thousand a year,

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what does that mean? They have to take a lot

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more out of their IRA, which means they're going to

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pay more taxes and the IRA could be sped down

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more rapidly, and you're going to pay one hundred percent

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all distributions from from the normally. Okay, this is just

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this is the blanket. You know. Usual most of the time,

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you're going to have to pay taxes on whatever you

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take out of the IRA. Now, remember that you're going

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to pay let's that you're going to pay eighty five

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percent of your social Security benefit in taxes. You're going

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to pay less in taxes if you optimize your social

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security and have a larger Social Security payment between the

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two of you and a smaller IRA distribution. So you know,

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obviously we don't know exactly but this is, you know,

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the worst case scenario of what could happen. You could

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if you had a distressful, not intelligent way of doing

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your investing in the stock market, you could lose a

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lot of value in your IRA, and you could spend

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it down more than what you would really like. So

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scenario B, you wouldn't have to take as much out,

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and so those are just these are some things to

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just really think about. So just to look at this

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in another way, you can see scenario A and how

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much of soil security you're having to pay taxes on.

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And there's a potential loss of fifty eight thousand dollars

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in this scenario if you take more money out of

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your ERA than what you really needed to if you

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would have maximized your soil security. So the thing is

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you're trying for one hundred thousand income. So if she

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has eighteen thousand and he has forty one, then you're

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you know, sixty percent of your one hundred thousand is

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coming from soil security as opposed to the other way around.

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So this doesn't tell you anything other than just to

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educate you about a hypothetical that may or may not

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apply to you. But That's why I want you to

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consider this is because if you can, if you can

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maximize what you're doing, you can avoid losing value in

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your IRA, you can avoid pain too much in taxes.

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And you can do this if you optimize your sole

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security benefits. So that was just a hypothetical. But let's

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dig in a little bit, digger a little bit deeper.

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What are the things that we think we need to

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look at. What is it you need to consider when

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you're retiring. How do you coordinate your soil security with

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the rest of your retirement assets like pensions and iris?

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What is the number one fear most retirees have. You've

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got to deal with this Medicare thing too. You've got

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to have health insurance. What does it mean? Accumulation phase

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and distribution phase? What's that all about? How do my

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emotion play in when I'm retiring? What are the rules

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for investing? And what might be an optimal way to

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think about coordinating assets? And if I was going to

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give myself a five step plan, what would that be?

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What would those five steps be for planning your retirement

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income streams? Okay, so what I'm trying to get at

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with you is what difference would it make in your

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life if you could optimize both your SO security benefit

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and the rest of your income. What difference would it make? Well,

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here's the things to consider. Your retirement goals, your age,

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your budget, your pension options, your current health, your family

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health history. What are the factors that might impact your longevity,

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your needs, your budget? What retirement assets do you have now?

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Do you have a large four oh one K or

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a large IRA? How long would it last? Do you

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have a wrath? You got to what I'm going to

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be trying to tell what I'm going to teach the

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very tippy top of is considering an academically engineered way

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of looking at how to do investing. So here's the

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challenges to creating retirement income, life expectancy, inadequate savings, inflation, taxation,

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uncertainty in the markets, rising health care costs, unrealistic expectations,

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bad advice. But the number one fear of retirees, what

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do you think? It's running out of money in retirement?

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That is the number one thing. And remember that that

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data showed you about how long we're going to live?

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Well is something to think about. Well, not only that,

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you get this thing called Medicare coming at you like

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a freight train. You have to do something about Medicare

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at age sixty five, and the Medicare system is a

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huge system. If you I hope you're not, But if

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you are already receiving SOI Security, you are automatically enrolled,

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and you're going to get your Medicare card in the

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mail three months before your sixty fifth birthday, or if

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you were disabled, your twenty fifth month of disability. But

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hopefully I pray, I pray, I pray that you are

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delaying your sole security benefits, then you're going to want

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to enroll in Medicare through the Social Security Office sometime

302
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the three months before your birthday or the three months

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after your birthday. In most cases, you will automatically get

304
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at Part A, which is basically hospitals, and Part B

305
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starting the first day of the month you turn sixty five. Now.

306
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Part B is basically think doctor B. It's the doctors.

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If you already, if you still have group insurance, then

308
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you're gonna get Part A, but you're not going to

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get full Medicare until you stop your your group at

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health insurance. If you happen to be a baby on

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the first day of the month. Then your coverage starts

312
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the first day of the month, prior to your birthday.

313
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All right, but it's something that you have to deal with.

314
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So you're gonna if you hopefully are delaying your your

315
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Social Security benefit, then you're gonna pay your part B premium,

316
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which right now is I'm gonna say it's basically one

317
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hundred and seventy five dollars, could be more. You will

318
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be paying your Part B premium directly out of your

319
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checking account, right they will pull that premium every month

320
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and Medicare and that money will go to Medicare. And

321
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then when you stop your group health insurance if you

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have that, you're going to have to choose between something

323
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called original Medicare and a med SUP plan or a

324
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Medicare Advantage plan. I highly, highly, highly recommend that you

325
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have a Medicare agent, and I don't think it's going

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to be a problem for you to find them. They

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are everywhere during the enrollment period, which is in October

328
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through to the beginning of December. But please realize that

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you are going to have to interact with this, and

330
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then when you do start your Social Security your Part

331
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B premium is going to be taken directly out of

332
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your Social Security pet payment. But we have a lot

333
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of baby bloomers who are reaching social Security age, and

334
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there's a lot that are living in communities that are

335
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fifty five plus communities, and many, many, many are having

336
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healthier lives later. They're not sitting around in rocking chairs.

337
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They're out playing golf, they're out there playing pick a ball.

338
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And so let's really think about how SOB security payments

339
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fit in with the rest of those retirement assets. Now,

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I'm going to show this to you again because I

341
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want you to think about this. You you're going to

342
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you know, you have a good chance of reaching your

343
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ninetieth birthday for sure, if you're a guy, if you're

344
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healthy at sixty five, women you might reach ninety five.

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And if you're a couple, there's a good chance that

346
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both of you might be around.

347
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Now.

348
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The thing is, you're going to want to have. Health

349
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is your first wealth, right, So yes, we're talking. I'm

350
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a financial advisor, but boy am I interested in health

351
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and wellness issues, which those will be regularly addressed on

352
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this podcast as well. But that chance of a couple

353
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living into their nineties and having one of them at

354
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least live beyond one hundred. You've got to have money

355
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to be able to take care of your needs. Right,

356
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And if you're like me, I don't. I mean, I

357
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love my girls, I love my family, but I don't

358
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want them to have to be worrying about me. I

359
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want to be self sufficient, and I think a lot

360
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of other people are there with me. Well, let's talk

361
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about the two distinct phases of your financial life. You

362
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didn't maybe know that you had two distinct phases. Phases

363
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is one you have been doing your whole life, called accumulation,

364
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and then you are moving into the distribution phase. Well,

365
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what in the heck is the accumulation phase? Well, you've

366
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had family, most likely in some way, shape or form.

367
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You've been saving or you've been told to save, and

368
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you've had growth in a lot you know, not only

369
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your waistline but savings accounts, and you've had ups and downs.

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But you have been accumulating, accumulating, accumulating pretty much your

371
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whole life. Well, what happens when you say I'm going

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to retire and I'm going to do something different. Well,

373
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now now you're going I need enough income to enjoy

374
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my life. And you say hmmm. I don't want to

375
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lose it. I don't have time to go through like

376
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a market correction. I want it to be protected, but

377
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I still want it to grow. Hmm. I don't want

378
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to waste taxes. I don't want to pay too much

379
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in taxes. So you want it to be efficient. And

380
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most people are going to say, I want to leave

381
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something to my kids. I want to leave something in

382
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my will for them. So what's the best way to

383
00:27:21.519 --> 00:27:27.039
do that. Well, there's something else that goes and gets

384
00:27:27.079 --> 00:27:30.640
on top of this, and that's your motions. There's there's

385
00:27:30.680 --> 00:27:35.240
a whole field called behavioral finance and how do your

386
00:27:35.240 --> 00:27:38.359
emotions get in the way of smart retirement income planning?

387
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Sometimes people just emotionally make decisions that are not in

388
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their best interest. Usually you're all you're thinking about is

389
00:27:47.759 --> 00:27:52.039
just trying to get the best return, but there really

390
00:27:52.079 --> 00:27:57.720
could be hidden emotional desires running the bus right. So,

391
00:27:58.240 --> 00:28:02.079
how you view money and this is something.

392
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That I if you get my book, you'll see that

393
00:28:08.119 --> 00:28:10.799
your future and your dreams hang in the balance with

394
00:28:10.880 --> 00:28:11.880
how you view money.

395
00:28:12.559 --> 00:28:16.359
Your retirement as well could depend on whether you're able

396
00:28:16.400 --> 00:28:21.839
to protect yourself from misinformation. Most of us need money

397
00:28:21.880 --> 00:28:25.880
to realize our dreams. It's not the only thing, but

398
00:28:25.960 --> 00:28:28.279
it sure helps when we want to take a trip.

399
00:28:29.119 --> 00:28:31.640
We need to do all we can to take care

400
00:28:31.720 --> 00:28:36.839
of ourselves, and those government benefit checks are a nice bonus,

401
00:28:36.839 --> 00:28:40.039
aren't they. And you have to make a plan to

402
00:28:40.079 --> 00:28:45.559
protect and accumulate wealth for yourself and secondarily for your family.

403
00:28:46.640 --> 00:28:50.039
So who do you believe? What advisor out there can

404
00:28:50.079 --> 00:28:54.400
you trust? Well, hopefully I can help you with some

405
00:28:54.480 --> 00:28:57.599
of those. I'm going to show you some of my ideas.

406
00:28:58.200 --> 00:29:03.200
Now I am. I'm not a big fan of stock picking,

407
00:29:04.200 --> 00:29:08.640
and I call them the purveyors of investing programs and newsletters.

408
00:29:09.400 --> 00:29:14.119
Sometimes they're called prognosticators and gurus, but they're the people

409
00:29:14.200 --> 00:29:17.799
who tell you what's going to happen with the economy,

410
00:29:18.000 --> 00:29:23.880
with the market. With GDP, they say they can predict

411
00:29:23.880 --> 00:29:26.440
things like which market sectors are going to be good,

412
00:29:27.440 --> 00:29:31.400
what economic information will move the market, or when the

413
00:29:31.440 --> 00:29:34.599
market is going to crash or when it's going to

414
00:29:34.640 --> 00:29:40.519
go up. Ah. So newsflash, nobody knows what tomorrow is

415
00:29:40.559 --> 00:29:44.359
going to bring. You ask those people that were on

416
00:29:44.400 --> 00:29:47.319
those planes that crashed into the World Trade Center, and

417
00:29:49.720 --> 00:29:53.000
nobody knew what was going to happen that day. Right,

418
00:29:54.119 --> 00:29:57.759
So I'm not a big fan of prognosticators and gurus

419
00:29:57.839 --> 00:30:01.559
if they say they can guarante you blah blah blah,

420
00:30:01.839 --> 00:30:05.880
Run Run, Run Run. So I want to give you

421
00:30:05.960 --> 00:30:12.000
another fun little example. There's a lot more mutual funds

422
00:30:12.079 --> 00:30:15.680
out there than there are stocks. So I have a

423
00:30:15.759 --> 00:30:18.839
question for you. If any mutual fund really knew who

424
00:30:18.880 --> 00:30:21.079
was going to be the best fund manager, how many

425
00:30:21.799 --> 00:30:25.680
how many mutual funds would they'd need? Well, I would

426
00:30:25.720 --> 00:30:29.960
say they needed only one. But there's you know, there's

427
00:30:30.160 --> 00:30:34.319
thousands and thousands and thousands of funds trying to figure

428
00:30:34.319 --> 00:30:38.119
out what the best combination is. Now this is you know,

429
00:30:38.200 --> 00:30:40.240
so you can see there's a lot more funds than

430
00:30:40.279 --> 00:30:45.440
there is stocked. And so to me, that just shows

431
00:30:45.480 --> 00:30:48.799
me that they keep trying to find different ways to

432
00:30:48.960 --> 00:30:51.640
figure out what's going to be the magic bullet for

433
00:30:52.960 --> 00:30:56.640
a mutual fund. Basically, what I'm going to be teaching

434
00:30:56.680 --> 00:31:02.240
you today is a wide diversifi'd approach to basically buy

435
00:31:03.240 --> 00:31:09.480
the entire market. So here's another interesting little slide. So

436
00:31:09.559 --> 00:31:13.240
it shows that Korea has the most funds. The US

437
00:31:13.359 --> 00:31:16.440
is number four in this charge. But it just shows

438
00:31:16.480 --> 00:31:22.119
you that worldwide, we have a propensity for putting together

439
00:31:22.240 --> 00:31:24.400
mutual funds to try to figure out what's going to

440
00:31:24.480 --> 00:31:28.559
be the best thing to do tomorrow. So what would

441
00:31:28.640 --> 00:31:31.599
you say, what would the perfect investment look like if

442
00:31:31.640 --> 00:31:35.039
you were thinking about this. Well, hmm, here might be

443
00:31:35.119 --> 00:31:37.319
some of the things that you would look at. Oh,

444
00:31:38.160 --> 00:31:44.119
it would never lose any money, right, never lose any money.

445
00:31:44.279 --> 00:31:48.799
It have guaranteed income for life. Oh, wouldn't that be sweet.

446
00:31:49.160 --> 00:31:51.720
It would be one hundred percent liquid. If you needed money,

447
00:31:51.720 --> 00:31:54.440
you could get into it and with no surrender charges.

448
00:31:54.519 --> 00:31:59.640
It'd be fantastic. It would have double digit returns. Wouldn't

449
00:31:59.680 --> 00:32:04.200
that be sweet? And it would be tax efficient. Oh,

450
00:32:04.279 --> 00:32:09.759
my gosh, that would be the best. So you would

451
00:32:09.799 --> 00:32:14.599
have protection, it would be liquid, and it would and

452
00:32:14.640 --> 00:32:23.200
you'd have growth. Well, guess what, it doesn't exist. There

453
00:32:23.240 --> 00:32:26.240
isn't one thing out there that can do all those things.

454
00:32:26.880 --> 00:32:29.160
When you have if you don't have any risk, you

455
00:32:29.200 --> 00:32:32.319
also usually don't have much interest. If you have a

456
00:32:32.359 --> 00:32:34.720
lot of risk, you have a potential for a lot

457
00:32:34.759 --> 00:32:38.960
of interest, but you can also lose a lot. So

458
00:32:40.480 --> 00:32:44.359
couple that with this behavior finance thing I was talking

459
00:32:44.400 --> 00:32:49.079
to you about. We can think some pretty crazy things.

460
00:32:49.759 --> 00:32:53.079
And in most cases, the investor doesn't know what they

461
00:32:53.160 --> 00:32:57.720
don't know. Right, Think about that, we don't know what

462
00:32:57.759 --> 00:33:01.920
we don't know? Oh boy, is that a worry. You

463
00:33:02.079 --> 00:33:08.599
have perceptions, you have instincts, you have your cognitive functioning,

464
00:33:09.359 --> 00:33:13.720
and then you have your emotions. And sometimes emotions gets

465
00:33:13.759 --> 00:33:15.960
in the way and we do things that are not

466
00:33:16.119 --> 00:33:19.839
in our best interest. Here's another way to look at this.

467
00:33:22.319 --> 00:33:27.359
You need to think about three different buckets. All right,

468
00:33:28.240 --> 00:33:34.079
let's call these buckets. So A is the liquid emergency

469
00:33:34.119 --> 00:33:38.519
fund money like checking accounts, savings, money markets. They don't

470
00:33:38.519 --> 00:33:41.480
give you much interest, but they're liquid and if you

471
00:33:41.519 --> 00:33:45.119
need money then you can go to those. Now. B

472
00:33:46.359 --> 00:33:52.000
is where so security fits. It's more like a guaranteed

473
00:33:52.359 --> 00:33:58.640
income that comes from insurance, from life insurance, from annuities.

474
00:33:59.279 --> 00:34:03.400
And that's the sort of thing where life insurance and

475
00:34:04.160 --> 00:34:08.880
social security ben it fits fit. Now C is for

476
00:34:09.000 --> 00:34:12.199
one case, stocks and bonds. You can have a lot

477
00:34:12.239 --> 00:34:14.519
of gain, but you can have a lot of loss

478
00:34:14.559 --> 00:34:22.440
as well. So A is your emergency it's liquid and

479
00:34:22.440 --> 00:34:25.599
and it you know, provides you protection but not much growth.

480
00:34:27.239 --> 00:34:30.840
B is like your SOI security benefit. There's protection there

481
00:34:31.840 --> 00:34:35.519
but not a lot of growth, and a lot of

482
00:34:35.559 --> 00:34:38.119
times surrender charges. If you're in an annuity or some

483
00:34:38.239 --> 00:34:41.119
kind of insurance program, you're gonna have surrender charges if

484
00:34:41.119 --> 00:34:45.679
you try to get your money out c You do

485
00:34:45.840 --> 00:34:50.039
not have guaranteed growth. You have the potential for growth,

486
00:34:50.320 --> 00:34:52.800
but it could be risky, and especially when you're going

487
00:34:52.840 --> 00:34:56.519
into requirement, you don't want that. And it's also something

488
00:34:56.599 --> 00:34:59.119
that you usually try not to put your hands on.

489
00:34:59.519 --> 00:35:01.719
You try to leave it alone so it can grow.

490
00:35:03.599 --> 00:35:09.960
So let's talk about some rules. So that middle bucket,

491
00:35:10.039 --> 00:35:13.519
the green money rules for guaranteed or protected income that's

492
00:35:13.719 --> 00:35:18.199
like social Security and annuities. Number one, it does protect

493
00:35:18.199 --> 00:35:23.400
your principle, yes it does. Number two, it can protect

494
00:35:23.480 --> 00:35:27.119
your gains. There's no volatility up or down. But a

495
00:35:27.159 --> 00:35:30.760
lot of times those out there that tell you that

496
00:35:31.000 --> 00:35:33.840
also don't give you the other side of the story

497
00:35:33.880 --> 00:35:37.559
with cap rates and other things that might not be

498
00:35:37.639 --> 00:35:40.119
such a good thing for you. But it does protect

499
00:35:40.119 --> 00:35:44.760
your gains and protect you from downside volatility, and it

500
00:35:44.800 --> 00:35:49.719
does protect your income. But they're not much growth, but

501
00:35:49.840 --> 00:35:53.960
that might be okay depending on your risk tolerance. Now

502
00:35:54.039 --> 00:36:01.280
that red bucket, the stock market portfolio, there are ways

503
00:36:01.840 --> 00:36:06.000
to do a successful investment account, and here's my rules

504
00:36:06.079 --> 00:36:09.880
for that. Don't try to pick stocks we don't know

505
00:36:09.920 --> 00:36:13.239
what's going up or down tomorrow. Don't try to time

506
00:36:13.280 --> 00:36:20.000
the market right. Same thing. And that guru he had

507
00:36:20.039 --> 00:36:23.880
a great run last year. He doesn't know what the

508
00:36:23.920 --> 00:36:26.679
future is going to hold any more than anybody else.

509
00:36:27.800 --> 00:36:29.639
So you can tell I'm not a fan of something

510
00:36:29.719 --> 00:36:34.599
called active management. I instead urge you to consider and

511
00:36:34.920 --> 00:36:39.039
learn about something having an account that can be a

512
00:36:39.079 --> 00:36:45.840
globally diversified buying the whole market type of thing, structured investing.

513
00:36:47.400 --> 00:36:50.400
It's an idea that we teach to all of our clients.

514
00:36:52.039 --> 00:36:56.360
So here's a term that I'm going to introduce you to.

515
00:36:56.519 --> 00:37:01.639
Free market portfolio theory, and that is the synthesis of

516
00:37:02.280 --> 00:37:07.960
several academic principles formulated by I'll call them academics who

517
00:37:08.039 --> 00:37:13.360
have won Nobel Prizes and economics for these methods. Efficient

518
00:37:13.400 --> 00:37:18.800
market hypothesis, modern portfolio theory, the three factor model. Those

519
00:37:18.840 --> 00:37:20.440
are all things that we get into in a lot

520
00:37:20.519 --> 00:37:25.320
detail when we're really actually working with somebody. But together

521
00:37:26.239 --> 00:37:33.599
these concepts form a powerful, disciplined and diversified approach. There

522
00:37:33.679 --> 00:37:40.199
isn't any stock picking involved, we're basically buying the market.

523
00:37:40.719 --> 00:37:45.199
As Harry Markowitz said, the result is a globally diversified

524
00:37:45.239 --> 00:37:51.159
portfolio that includes thousands of equity or stocks and thousands

525
00:37:51.239 --> 00:37:57.320
of fixed incomer bonds. Those are called holdings, spread across

526
00:37:57.440 --> 00:38:00.280
lots and lots of countries, not just the United States,

527
00:38:01.079 --> 00:38:03.920
and it's designed and engineer to capture market rates a

528
00:38:03.960 --> 00:38:10.119
return over specific time horizons. So this is not something

529
00:38:10.159 --> 00:38:14.760
that the typical person can accomplish. It is truly a discipline,

530
00:38:14.800 --> 00:38:22.159
diversified approach that usually takes a team to accomplish. So

531
00:38:22.559 --> 00:38:26.400
do you know what the questions are when you're asking

532
00:38:26.440 --> 00:38:30.760
about something like this? Do you know the questions when

533
00:38:30.840 --> 00:38:36.039
it comes to how to invest? Well, you know the

534
00:38:36.119 --> 00:38:39.800
name of my podcast, And the quality of your life

535
00:38:39.840 --> 00:38:44.239
will be determined by the quality of your questions. So

536
00:38:44.760 --> 00:38:49.800
questions like, how does markets work, how do you measure

537
00:38:49.880 --> 00:38:54.519
volatility and risk? How do you measure the quality of

538
00:38:54.599 --> 00:39:00.000
a fixed income instrument? How do you build an investment portfolio,

539
00:39:01.079 --> 00:39:06.239
how do you rebalance a portfolio? How in the heck

540
00:39:06.360 --> 00:39:09.920
is that advisor pain? How do you diversify?

541
00:39:10.639 --> 00:39:10.719
It?

542
00:39:10.840 --> 00:39:14.119
Kind of goes on and on things like that, right,

543
00:39:15.000 --> 00:39:20.719
so this is what hangs in the balance. In the

544
00:39:21.199 --> 00:39:24.559
bottom line is you're gonna want adequate income for your retirement,

545
00:39:25.760 --> 00:39:29.199
and that income is typically going to come from social Security,

546
00:39:29.800 --> 00:39:34.920
your retirement savings, maybe a pension. You're gonna want protection

547
00:39:35.039 --> 00:39:38.960
and growth. You're gonna want tax efficiency, and in a

548
00:39:38.960 --> 00:39:41.239
lot of cases, you're gonna want to leave some kind

549
00:39:41.239 --> 00:39:46.639
of legacy for your family. So we don't know what's

550
00:39:46.719 --> 00:39:50.000
going to happen, do we. We don't have a crystal ball,

551
00:39:51.400 --> 00:39:59.800
but so we use the best data for accomplishing this,

552
00:40:00.280 --> 00:40:05.360
buying this whole globally diversified approach. So this is kind

553
00:40:05.400 --> 00:40:09.840
of a fun thing to look at. Remember me talking

554
00:40:09.880 --> 00:40:14.559
to you about behavior finance, and when the market's going up,

555
00:40:14.639 --> 00:40:17.599
you can have thrills and optimism, and then when the

556
00:40:17.639 --> 00:40:22.960
market tanks panic. Well, my goal is to keep you

557
00:40:23.000 --> 00:40:28.000
from having that kind of craziness because we've seen it

558
00:40:28.079 --> 00:40:33.440
in the past, haven't we. And you know, when you

559
00:40:33.519 --> 00:40:36.639
think about that, you don't know what's coming. We don't

560
00:40:36.679 --> 00:40:40.760
know when markets are going to cycle. The biggest fear

561
00:40:40.800 --> 00:40:44.239
you might have now is saying, I'm going into retirement.

562
00:40:44.880 --> 00:40:50.320
I can't stomach a market cycle of you know, a

563
00:40:50.360 --> 00:40:54.840
bear market and having a major bear market happen, and

564
00:40:54.960 --> 00:40:58.400
so you don't want to have to worry about that.

565
00:40:59.000 --> 00:41:04.159
So it's critical that you get educated on what is

566
00:41:04.199 --> 00:41:08.519
the right thing for you to do. Right. So here's

567
00:41:08.559 --> 00:41:15.559
our buckets again. Now remember A is the emergency money.

568
00:41:16.239 --> 00:41:21.039
It's liquid, doesn't get much interest, but it's liquid, checking savings,

569
00:41:21.079 --> 00:41:26.320
money markets. B that the B bucket is where so

570
00:41:26.480 --> 00:41:30.760
security lives, it's where insurance products live, it's where annuities live.

571
00:41:32.280 --> 00:41:35.880
And then C is the stock market, and that's where

572
00:41:36.000 --> 00:41:40.119
you have the potential for growth. And it's more the

573
00:41:40.159 --> 00:41:43.480
stocks and the bonds and the mutual funds. They're all

574
00:41:43.519 --> 00:41:47.719
appropriate to have. It just is what do you need

575
00:41:47.760 --> 00:41:51.880
to do to make it worth your while. Here's five

576
00:41:51.920 --> 00:41:57.159
steps to plan your portfolio and a satisfying lifetime income stream.

577
00:41:57.599 --> 00:42:01.960
So step one, determine security benefits and when to take that.

578
00:42:03.360 --> 00:42:08.079
Determine how much you want liquid That means that emergency funds.

579
00:42:08.119 --> 00:42:12.000
Figure out what that is. Decide what percent you need

580
00:42:12.039 --> 00:42:17.039
in your investments that see bucket. That's going to leave

581
00:42:17.119 --> 00:42:20.719
your protected or annuity type income like your Social Security

582
00:42:20.760 --> 00:42:25.480
benefit and any pension income. All right, so you're going

583
00:42:25.519 --> 00:42:29.280
to combine your social security benefits, any pensions, and a

584
00:42:29.519 --> 00:42:34.159
smart engineered investment account. We'll give you a diversified approach

585
00:42:34.679 --> 00:42:38.360
to retire an income so we can help you. If

586
00:42:38.360 --> 00:42:43.079
it's not us, please find a good, trusted advisor that

587
00:42:43.159 --> 00:42:47.639
you can work with. All right, So why should you

588
00:42:47.760 --> 00:42:51.840
learn about doing this? Well? In our case, we're a

589
00:42:51.880 --> 00:42:55.920
real investor coach. That's what we do. We really do

590
00:42:56.000 --> 00:43:00.239
help people with an income plan we recommend and an

591
00:43:00.239 --> 00:43:04.599
allocation plan that makes sense and works for you. For

592
00:43:04.880 --> 00:43:08.480
you know your situation in your life, and then and

593
00:43:08.679 --> 00:43:13.039
we do answer along the way needs, goals, desires, pension

594
00:43:13.079 --> 00:43:19.039
option questions, wills, trust and estate planning, and you know

595
00:43:19.119 --> 00:43:21.440
what you've got to think about long term care for

596
00:43:21.480 --> 00:43:27.880
the future, and then those those health insurance and medicare questions. Right, So,

597
00:43:28.119 --> 00:43:33.159
in closing retirement can be difficult, but it can also

598
00:43:33.199 --> 00:43:37.559
be an exciting, exciting time of life. Can you afford

599
00:43:37.639 --> 00:43:42.519
to worry about making a mistake? Find a financial professional

600
00:43:42.559 --> 00:43:45.639
that can assist you with experience and a proven track record.

601
00:43:46.360 --> 00:43:49.800
We do offer that complimentary consultation with our team to

602
00:43:49.880 --> 00:43:53.840
have a discussion about your personal situation. You're going to

603
00:43:53.920 --> 00:43:57.960
find downloads and the link to schedule that at the

604
00:43:57.960 --> 00:44:04.239
website at Ask Good Questions podcast dot com. So good job.

605
00:44:04.320 --> 00:44:09.559
I'm thinking about asking good questions. Be prepared to optimize

606
00:44:09.599 --> 00:44:14.559
your social security and retirement income by being educated on

607
00:44:14.599 --> 00:44:18.679
the subject and taking positive action. Thank you so much

608
00:44:18.719 --> 00:44:24.000
for attending. Next week we're going to be talking about

609
00:44:24.159 --> 00:44:29.679
cybersecurity and identity theft. That's actually going to be on Christmas.

610
00:44:30.280 --> 00:44:34.000
It's every Wednesday. This podcast is every Wednesday at six

611
00:44:34.079 --> 00:44:37.760
pm Eastern and we so hope that this was a

612
00:44:38.039 --> 00:44:45.079
useful way of giving you some some things to think about,

613
00:44:45.639 --> 00:44:49.280
and we appreciate you attending. Thank you so much for

614
00:44:49.360 --> 00:44:49.840
being here.

615
00:44:53.079 --> 00:44:56.679
Today's episode is over, but we did ask Good Questions again,

616
00:44:56.840 --> 00:45:01.039
didn't We don't miss out as we broadcast live every Wednesday,

617
00:45:01.079 --> 00:45:04.800
six pm Eastern Time on W four CY Radio at

618
00:45:05.039 --> 00:45:09.239
w fourcy dot com. Joined Benina Bellmerson next week for

619
00:45:09.440 --> 00:45:15.079
more conversations with experts on finances, retirement, behavioral finance issues,

620
00:45:15.119 --> 00:45:19.800
health and wellness and more. Until then, remember to ask

621
00:45:19.960 --> 00:45:21.239
good Questions.