Ep 45: Planning For Things We Can’t Predict

On This Episode

There are certain things in life we just can’t predict. If we knew the answers to some of these questions, planning for retirement would sure be a lot easier. So let’s see how you go about constructing a plan that addresses the kinds of questions to which you can’t possibly know the answers.

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PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:


Speaker 1: Hey everybody. Welcome into another edition of Retirement Planning Redefined with John and Nick from PFG Private Wealth. Find them online at pfgprivatewealth.com. That’s p-f-g-private wealth.com, where you can check out a lot of good tools, tips, and resources, schedule some time with the team or subscribe to the podcast on whatever platform you like to use. And on the podcast us this week, we’re going to talk about planning for things that we cannot predict. There’s many things in life that are just out of our control, and we can’t predict. Yet, we somehow have to figure out a way to bring these things into the fold when it comes to our retirement strategies. And if we knew the answers, these things would be a lot easier to do, right? Just like saying, if we knew when we were going to pass away, you guys could build the greatest plan anybody’s ever seen, but we don’t come with a timestamp on us. So we have to figure out a way around some of these complicated questions and construct a plan that handles these, but also works with the unknown. So we’ll get into that in just a second, but what’s going on, Nick? How are you doing?


Nick: Doing pretty good. Thanks.


Speaker 1: Yeah, how’s the old puppy doing? I’ve got mine next to me right now while we’re taping.


Nick: Unfortunately she passed like a month ago.


Speaker 1: Oh, I’m sorry, buddy. I didn’t mean to do that.


Nick: It’s all right. Oh yeah, no, I don’t take it like that. I was going to say something earlier and then I just kinda left it, but yeah, it’s been a bit of a crazy month.


Speaker 1: I gotcha. I’m sorry to hear about that. It’s always rough when we lose our little furry friends there as well, but hopefully things will get better for you. And we’ll talk about something, you can’t predict that kind of stuff. Right? We’ll get into that kind of conversation here in a second. John, what’s going on with you?


John: Today’s topic is pretty fitting. I couldn’t predict that the house I bought had a loose AC drain and currently all the floors in my master bedroom and hallway ripped up. It’s going well, as well as can be. So we’re adapting to the renovations in our house currently. I just send Nick some pictures of it and he’s like, whoa.


Speaker 1: Oh, wow. Well, I put my foot in my mouth already to start the show, so we’ll get into it. But I guess that fits really well though with the over conversation is, because there’s a lot of things. I mean, life is unpredictable, right? Murphy’s law, whatever you want to subscribe to. And so we still have to somehow plan for some things, look at the state of the world, right? Who would’ve predicted 7.9% inflation rate, who would’ve predicted. What we’re seeing in the Ukraine and so on and so forth. So it all affects the financial side. So we’ll turn our attention there as we typically do. And a lot of times guys with what you do for a living, I imagine, and I talk to advisors all across the country when they meet people that do what you guys do for the first time, almost inevitably somebody goes, Hey, so when’s the next market crash, right? They kind of like you guys, somehow some know this magical information that when the next it crash is going to be, well, you can’t predict for that, John, but you still got to plan for being able to retire in any economy regardless of what the market’s doing.


John: Yeah. And this point I’m going to say, probably goes for all of these things we’re discussing today. Is you really want the flexibility to adapt for any, I don’t say any, a lot of situations that come up in retirement and one of those are, a market pullback or a crash, so things to put yourself in a pretty good position is, we kind of stress this, is having a decent cash savings. So if the market is crashing, you can rely on your cash savings for income during that period of time. So you don’t sell any of your losers and realize those losses. So there’s a lot of things you can, you can’t predict it, but you could definitely set yourself up in a situation where you can adapt to it, to put yourself in a good situation moving forward.


Speaker 1: Yeah. And as I mentioned on the last podcast, we were talking about the fact that we were dealing with overconfidence as one of the money biases. And the last several years, it’s been easy to get confident in the market, but when we start to see these downturns or corrections, like we’re going through right now, people get nervous and they tend to do the wrong thing. So you can’t predict when it’s going to happen, but you want to make sure that you’re setting yourself up in a way to work through that. And Nick, similarly, we could talk about healthcare costs, right? I mean, who knows what they’re going to look like in 20 years? Now a good bet is probably that they’re going up more than likely, right? Unlike the market crash, where there is some historical data, I mean, healthcare costs, the reality is we’re living longer. So more than likely these costs are going up, but how can you plan for that? If you don’t really know, you just have to start, kind of chipping away at this. Maybe.


Nick: Yeah. It’s interesting because this is one thing that we can probably lock in that it will go up and will continue to go up. But from a practical sense, in a practical standpoint, the things that we can do are from a planning perspective, make sure that when we’re planning for them, for these healthcare related expenses that we understand what’s involved. So as an example, a lot of people think about, well, Hey, I know that my healthcare expenses are going to get higher later on down the road, but many times they don’t understand. And when we see this all the time that even their cost for Medicare, when they switch to Medicare in retirement, there’s a decent chance it’s going to cost more than what they’re currently paying for their health benefits through their work.


Nick: And because a lot of people have that concept that it goes down versus most likely going up from a premium perspective for a lot of people. Using a higher inflation number for those healthcare premiums and healthcare related expenses, which is something that we make sure that we do with clients where we’ll use a three and a half to 4% inflation number on healthcare related expenses in the plan, which tends to be, one to two points higher than the rest of the categories in for inflation.


Nick: So, things like that where we can’t predict it, but at least from a modeling standpoint, we can kind of, use a prudent person rule of, making sure that we at least model those things to be a little bit higher and faster, increasing costs, especially when we look at how those plans are being financed by the government, which is not great.


Speaker 1: Yeah. And that’s a great point because even in normal inflationary times, right? What is it the two industries that outpace even regular inflation on the regular is college tuition, right? And healthcare. So while college tuition may not be affecting as many of retirees or as maybe pre-retirees the healthcare certainly is going to affect them. So you got to take that into account and definitely start strategizing for those healthcare costs. Putting your head in the sand is not going to help you out 20 years later when you need it. And John, you could kind of make that same argument really about the tax rates. Right? The Smart bet, the money is probably on the fact that yeah, they’re going up, but God willing, you’re going to live through multiple administrations in retirement. So, to say, well, what are tax rates going to look like three presidents from now who knows, right? Administrations are going to do what they got to do.


John: Yeah. And that’s where, again, it’s important to flexibility to adapt to the situation and how you get flexible is diversifying your assets from a tax standpoint. So, and you might want to look at, increasing your Roth contributions, if you have a Roth 401k at work or eligible to contribute to a Roth IRA. So that could be a really good strategy. So that way, if tax rates are up, when you’re taking your income, you could say, Hey, you know what, I’m going to take some of my tax free income this year or for these next couple of years. And you can really adjust to that situation. And not just only with Roths, but you could go outside of retirement accounts and kind of deal with capital gains. But then you got the same issue there with what are the rates going to be?


John: What Nick and I have been seeing quite a bit lately is clients really over funding their HSAs and not using them, just letting them build up for retirement. Cause that would be a nice tax free distribution, if qualified for healthcare costs, which also piggybacks what Nick was talking about. About healthcare costs, not knowing what they’re going to be. So there are definitely different things you can do to allow yourself some flexibility. And one thing that we typically do when we’re doing planning is we do stress test these things for certain clients. Where we’ll look at some kind of market pull backs. How does your plan look like if there’s a 20% pull back? What if healthcare costs go up? What if inflation goes up? So there’s definitely things you can do to prepare.


Speaker 1: Now. Those are some great points right there because we, again, we don’t know what’s going to happen. The smart money is taxes are probably going up, we’ve got 30 trillion dollars in debt. There’s almost 40 plus trillion dollars in retirement money sitting out there, the taxes haven’t been collected on. So if that doesn’t have a bullseye on it, you’re probably kidding yourself. So trying to be as tax efficient as we can today could be beneficial. Because again, we have no idea what it would look like three presidencies from now.


Speaker 1: So these are, again, things we cannot predict, but we certainly got to still plan for some of the options that are out there. And Nick, I joked earlier that if we had an expiration date stamped on us, like a gallon of milk, you guys could build the greatest, retirement plan for each individual that they’ve ever seen, but we have no idea how long we’re going to live. And I could use my own self as an example for the listeners. My brother died at 50, I’m 50. My brother died at 57, my father at 63, my grandfather at 60, be easy for me to say, Hey, I’m going to spend all my money between now and the age of 65, because I’m not going to be here. So I’m going to party. But yet that’s not responsible, because what if I’m wrong? Technology has changed. And of course, what am I doing to my spouse?


Nick: Yeah, this is always an interesting one. It’s probably the source of the most quote unquote jokes from people. Whether it’s clients or people that attend our classes, that sort of thing. And really from a practical sense where this comes in is, how long do we plan for? So when we’re building a plan 99% of the time, we plan to age 100. And when we plan to age 100 for clients, we can see what, how much money’s there at age 85 and age 90 and all those sorts of things. And the thought process is that if the plan works until age 100, then the probability of it being successful up into, 80, 85, etcetera, is much higher. And the plan, what it will also help us do is for those people that do want to make sure that they spend their time early on in retirement, really doing the things that they want to do, no matter how much bluster there can be about, because again, usually it’s some sort of internal insecurity or internal bias that has them talking about passing away early.


Nick: But sometimes what we found is that, really they’re just saying that because they don’t want to deal with the concern of running out of money. It’s almost in a weird sense, comforting that, Hey, if I pass away early, then I don’t have to worry about money. This planning thing isn’t important. I don’t have to stress about it. No big deal. So in actuality, when you go through the planning process and you do see where you sit and you do see, Hey, maybe I can do the things that I want to do and I can still, make sure that there’s money down the road for a spouse, all these sorts of things. It actually really kind of tick up the confidence and they will enjoy those things much more than having that uncertainty because, and I’ve seen it across the board because what ends up happening. I mean, and again, just seeing it being in this business, people that had that thought process 60 today, used to feel like 50 70 today feels like it. when people were 60, 15 years ago, nobody realizes how old they are, or they have this perception of that they’re going to feel a certain way. And usually that’s not the case. So, planning for all scenarios is really important.


Speaker 1: No, definitely. I mean, my mom’s always joking. She’s 80 and she’s forever saying, I don’t feel it. when I, if I’m not moving or if I’m not doing anything, I don’t feel like I’m 80. She’s like in my mind I still feel like I’m 30 or 40. She’s like until I look in the mirror or I try to move a certain way.


Nick: Yeah. And unfortunately I had to go up to New York for a funeral this past month and my dad and I flew up and we walked into the room with some family members and stuff like that. And after the initial reminder that we’re no longer in the south due to how loud it was and all of the swearing. Somebody said something about because that side of the family, I was always one of the younger and I’m like, how old are you going to be? And I was like, I’m going to be 40 this year. And everyone looked and they’re like, and I was like, you know what? That means you guys are really old now. So, again, it’s that whole concept of people just don’t realize it. And the concept when you’re younger of what you’re going to feel like or what it’s going to feel like when you’re older, it never tends to be that way. So it’s important to really plan.


Speaker 1: Yeah. It definitely. So you got to plan for these things, even though we can’t predict them, how long we’re going to be around tax rates, healthcare costs, market crashes, whatever the case is, these things are again, probably going to happen throughout your retirement. And if you have a nice long retirement, which you certainly hope that you do, you might be retired 20, 25, 30 years. You’re going to experience multiple things with some of this stuff that you can’t necessarily predict for, but you still have to strategize to hopefully have the retirement that you want in any economy and any circumstance. So that’s where planning comes into place. And that’s what you got to reach out to the guys for here on Retirement Planning, Redefined with John and Nick at pfgprivatewealth.com. That’s where you can find them online, pfgprivatewealth.com. Don’t forget to subscribe to us on whatever platform you like to use. Apple, Google, Spotify, so on and so forth. And we’ll be back with more episodes coming up in a couple of weeks. Nick, thanks for hanging out as always. John Good luck with those floors, man.


John: Thanks. I definitely need and appreciate it.


Speaker 1: Absolutely. Nick, we’ll see you next time here on the podcast. This has been Retirement Planning Redefined with John and Nick from PFG Private Wealth.

Ep 37: Things That Don’t Matter Till They Do

On This Episode

Fire extinguishers, airbags in your car, and smoke alarms in your house are all examples of things in life that don’t really seem to matter until they’re the only thing that matters. On that rare occasion when you need one of those items, you’ll either be very glad that you have one, or really regretting the fact that you don’t. Let’s talk about some of the things in the financial world that don’t matter until they do.

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Check out all the episodes by clicking here.



PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:


Mark: Hey everybody, welcome in to another edition of the podcast. This is Retirement Planning – Redefined, with John and Nick from PFG Private Wealth. And we’re going to chat today about some things that don’t matter, well, until they do. And I’ve got some pretty good examples of that, so we’re going to get into that in just a second. But I don’t know, Nick, I feel like I should pick on you a little bit. Things that don’t matter until they do, is that the Buffalo Bills again this year or what?


Nick: Those are fighting words. It’s a good thing we’re in a different state. Now, what’s your football team?


Mark: I just had to pick on you because of the whole Tom Brady thing. I was going to talk to you about it, so you just couldn’t get away from this guy, right? He was kicking your butt in New England, then he comes down in your backyard and still knocks your team out. I actually felt for you this past playoff, so.


Nick: Yeah, it’s all good. We’ve got a real quarterback now so I’m okay with it.


Mark: Yeah.


Nick: I’m not a complete…


Mark: My team is total garbage, so you can pick on me all day long, so it’s no worries. My team is the laughingstock of the NFL pretty much on a regular basis.


John: Are you a Panthers fan?


Mark: That’s close. You think I would be because, same thing with you guys, I’m next to the Panthers so you think I would be. But no, I’m a Cowboys fan. Yeah. It’s the worst.


Nick: Nah. Trust me. It’s not the worst.


Mark: We get a lot of flack for Cowboys fans. That’s for sure.


Nick: Yeah, but it’s not the worst.


Mark: Gotcha. John, what about you? Do you pull for anybody?


John: The Patriots.


Mark: Oh my God. Wait, what? Oh my gosh, you two must have really gone back and forth.


John: Yeah, I grew up in right outside of the Boston.


Mark: That’s right, I remember that now yeah. So you guys have had some fun times over the last few years, haven’t you?


Nick: John used to ask me to watch games-


John: He refuses.


Nick: I couldn’t be around. I couldn’t be around people in public watching the game, but now that they’re a little bit better-


Mark: They had a great year last year, they really did, so.


Nick: They made the playoffs three out of the last four years.


Mark: Yeah, they did. They’re definitely on the run. So I just had to give you a little bit of a hard time, but it’s all good. It’s all good.


Mark: So listen, things that don’t matter until they do. So here’s some real examples, like a fire extinguisher, right? Who thinks about a fire extinguisher until you need one? Or the airbags in your car or smoke alarms in your house, all these things we just don’t pay any attention to until we actually really need one. And then we’re awfully glad that they’re there.


Mark: So I’ve got a couple of these financially speaking fellas. So talk to us about the importance of why these things can be kind of out of sight, out of mind. But man, we really need to have those ducks in a row. And let’s just start with an easy one, legal documents, right? Won’t matter until they do, but when you need it, man you’re going to be glad you’ve got it in place, and right.


John: Yeah, this is a great example of that. And where when you’re living and this happens is you have some type of health event and I just had a family member who just got an accident and healthcare surrogate had to step up and make some decisions and help them out during that process. So that’s something that you really need to consider doing some of these things. Meeting with an attorney that’s qualified to do this stuff, to make sure that your ducks are in a row.


John: And the unfortunate one where it’s too late is if you pass away and then now your beneficiaries are dealing with whatever estate, whether it’s trust, wills, documents that you did or didn’t do. I’ll tell you from Nick and I have helped a lot of clients kind of navigate that, if it’s not done correctly it can be a nightmare for your beneficiaries just to figure out where everything is and who is responsible.


Mark: Yeah. And it’s one of those things that’s easily avoidable, right Nick? I mean, this is not that hard to fix. This is, of the low hanging fruit that can be out there, you can do this stuff pretty easy. Especially things like beneficiary designation, updating those, so on and so forth. Wills and trusts, sure, they can be a little more complicated, but even that it’s not that complex. You’ve just got to get with an advisor and an attorney.


Nick: Yeah. What we’ve seen is that often times people don’t personally know an attorney or somebody in this space that can help them. Or, if they do, they’re private and they don’t necessarily want them to know everything about them. Or we’ll see people that just… It makes them extremely uncomfortable to talk about death, dying and, or being sick.


Nick: And so it’s a classic avoidance behavior. And like we had talked about previously, time flies and all of a sudden it’s five or 10 years later, and your mom and dad that you’ve had listed as the beneficiaries are no longer alive and kids are grown up or you had another child that’s not listed anywhere. Or maybe you got divorced or remarried.


Nick: All these things happen and if the documents aren’t in place or they’re lagging and inaccurate, it can turn into quite a quagmire if something happens. And I’ll say this too, is oftentimes when people think of the legal documents, they think of death and not necessarily what John referred to as far as healthcare proxy and a power of attorney, those sorts of things where there’s a health event and you’re still alive, but you need help making decisions and that can really get pretty squirrely.


Mark: No, I agree with you. And I think the other one we hear sometimes too as well, is, that’s for rich people, right? A trust is for rich people or so on and so forth. And it’s like, okay, that’s not really the case. And it’s really not as expensive to get some of this stuff taken care of as we often think it is. I think we build it up in our mind or whatever. We just kind of have this, oh, that’s for rich folks or it costs too much money so I’m just going to avoid it. Pretty easy to handle this stuff.


Nick: Yeah, I would say that’s accurate, as well as, and we’ve talked about the run-up in the markets over the last five or 10 years. There’s a lot of people that, seven, eight years ago they maybe had a third of the money that they have now. And so they still kind of are in the same train of thought or the same thought process. And they don’t realize maybe what they perceive… They still think of themselves in that same way as they did eight to 10 years or even 15 years ago. And there’s a little bit of disbelief. And so it kind of leads into kind of procrastinating and you almost have to kind of take stock and realize, okay, hey, this is something I really need to get done.


Mark: Yeah, exactly.


Mark: Well, that’s hopefully what we try to provide here on the podcast is there’s a little useful nuggets of information that might spark that conversation. And speaking of which, John, life insurance, not something that you’re really popping up at the dinner table saying, “Hey, let’s have a rousing conversation about life insurance.” Right? It doesn’t kind of go that way. But, again it’s one of those things that don’t seem to matter until you need it. And it can be quite important and quite useful tool.


John: Yeah, a hundred percent. I’ll say this is probably one of the most disliked conversations for people, is talking about life insurance and what happens after if they were to pass away or a spouse or whoever.


Mark: Right.


John: Especially with children, because when you have kids, and I have two daughters, one of the big things you look at is, I’ll use myself as a scenario, I’m gone. So there’s my income gone for the next 20, 30 years. So you really want to look at it from that standpoint when you’re talking about needs planning for life insurance is… I’m no longer here. My income’s no longer providing for my family. How do I replace that? And really life insurance is a great vehicle to go ahead and replace someone’s income for a 20, 30 year period. And there’s ways to back into what amounts are correct, but definitely something you need to look at when you’re doing a plan.


John: And going into retirement can be the same way depending, and Nick mentioned it on the last session where everyone’s situation is different. Well we’ve had scenarios where, there may be still is a need for life insurance in retirement because maybe one person has a heavy pension. And if that person passes away, that pension now is gone. And maybe that’s a big requirement for the plan to work.


John: So everyone’s situation is different. It’s definitely something that needs to be considered. You just want to take a look at it and see what would happen if someone did pass away and there wasn’t any life insurance. I’ll say a lot of these things that we’re going to go over too, I think it’s easy to address, there’s definitely people that can help you out. And it’s just a matter of getting it done. And once it’s done it just kind of provides a nice peace of mind that it’s kind of like a bandaid, just do it, rip it off.


Mark: There you go. Exactly. I think life insurance too, I will be honest. It’s a very important tool even for retirees, there’s a lot of ways it can be used. It’s not our daddy’s Oldsmobile like those old commercials. There’s just so many different nuances now to life insurance, where it could be a useful tool for various times of life, but I can’t help but thinking of Ned Ryerson and the Groundhog Day movie, when he comes up on Bill Murray, that insurance guy. I think that’s what a lot of times people think of when they think life insurance or life insurance agent, and it’s just changed so much. But it is a great movie.


Mark: Lifetime income streams. We kind of talk about this fairly often, but I mean, look, it’s one of those things maybe you don’t think about. You think, well, I’ve got these accounts, right? I got all this stuff, but how do I turn it into money because I do need money all through my retirement? I need a paycheck coming in.


Nick: Yeah. So, one of the things that we’ll say is that in retirement, income is king. Assets are great and assets are the thing that people love to talk about and kind of chat about, but income is king. And I’ll say too that everybody knows about social security. They realize in theory it’s important, that sort of thing, but many people, and this is something that we’ll kind of review with people often, is that they don’t quite realize like, well, hey, if your household is getting $60,000 a year in income from social security, which these days, a lot of people are. That is really equivalent to between one and $2 million of nest egg assets from the standpoint of generating a saving [column 00:09:37] , having it last your lifetime and getting inflationary raises.


Nick: So, building a portfolio or an overall strategy where, we’ve got quite a few clients that they have rental properties, that rental income, they purchased a property a little bit when they’re younger. They get the house or the property paid off, and the rental income supplements their income in retirement.


Nick: John referred to pensions, that can be a big deal. Annuities can provide a guaranteed income as well. So, trying to balance forms of guaranteed income with assets can be really important. And just a little caveat to throw in there, although income is king, it is important to have assets. So the reason I say that is we have had some clients come to us that have been, whether it’s between social security and pension, they’ve been income rich and asset poor, and that can also lead to other issues as well. So a good balance is really just like so many other things is really the most important part.


Mark: Well, balance is key, definitely balance is key to anything. And we all know we got to have these different forms of, or we have to have some income coming in, in retirement. But having the multiple streams and turning things on at different times, and whether you want to call it bucket strategies or laddering or whatever the case is, but just having these different various forms to be able to pull from at different times is going to make obviously all the difference in keeping up with our retirement. Because nobody wants to go backwards in their lifestyle in retirement. They want to kind of continue on the way they have been, or maybe even more so in retirement. So that’s some things that- go ahead.


Nick: And let me jump in on that too, that point that you made about not going backwards or maintaining is important. Because there are times, and I’ve had this happen a couple of times, when it comes to retirement and income in retirement and when it comes to life insurance, two of the topics that we talked about, in people’s minds they have an enormous amount of confidence that all of a sudden they no longer need any of the things that they’ve wanted and bought for the last 25 or 30 years. It’s like all of a sudden they flip the switch and it’s going to be the cheaper food, the cheaper restaurants, the cheaper car-


Mark: I’ve got plenty of clothes. I don’t need to buy any new clothes.


Nick: Yes. And in reality, people don’t live like that. And so that’s an important-


John: In reality, it’s typically the reverse. They have more time on their hands to go buy things.


Mark: Right, yeah. My dad always said every day was a Saturday when he got to retirement and he spends the most money on a Saturday, so, that always stuck with me.


Nick: Yeah most people live in a state of want versus need and it’s often, that’s a pretty common thing, so anyhow.


Mark: That always stuck with me. That’s a great point. Well, I’ll tell you what, that’s some things that don’t matter until they do so, again, whether it’s legal documents, pretty easy fix, life insurance, certainly a worthwhile conversation to have no matter what stage of life you’re in. And making sure definitely that you’ve got those income streams set up for life. Some key topics there that we talked about this weekend.


Mark: We’re going to take some email questions and wrap up because we want to get back to a couple of these here. We haven’t done these lately. And of course, anytime you submit a question, you’re going to get your question answered, but to just talk about someone here on the show, we kind of do those from time to time. If you’d like to drop a line, go to pfgprivatewealth.com, that’s pfgprivatewealth.com or call (813) 286-7776 if you’ve got some questions for your own situation that you need to get answered, and the guys will certainly tackle those for you.


Mark: But for right now, let’s see what we got from Linda who had sent an email question. And guys, she says, “Fellas, my daughter just turned 18 and I’d like to help her get off onto the right foot with some retirement savings. What’s a good idea for something to get her started with?”


John: Yeah, I’ll take this one. So, we’ve had this come up quite a bit with some of our clients and their kids, when they turn 18, they want to just get them used to investing or just understanding it which we think is very important. Some of the things we’ve done, it just depends. If the child is working, we might do a Roth IRA where we’ll go ahead and just open up a Roth retirement account. It’s a great vehicle for kids because they can tax free money in retirement. They could use it for a first time home purchase, et cetera, et cetera. So we’ve done that. We’ve just got to make sure that they’re working because you need earned income to contribute to a Roth.


John: If they are not working, there’s definitely some kind of joint accounts you can set up, but it’s definitely a good thing to do. Because I’ll tell you, we’ve done that for some clients and we’ve had those kids become clients early, right when they graduate college. And they’re pretty aggressive in saving. I have one where, as soon as he graduated he got in touch with me and then just started aggressively saving in his early twenties, which is very uncommon. And now he’s early thirties and he has a pretty sizable nest egg. And now he’s got kids and all this stuff and he can’t save as much because he does not have as much discretionary income. But it really set that foundation for him to really start saving for retirement, understanding how important that is.


Mark: No, I think that’s awesome that you’re having some people do that, especially at a younger age. And so kudos to her for getting her daughter start off on the right foot. And for people that just in general kind of have that interest. I had a young kid that I knew for a couple of years ago that used to work for me. Same thing. Early on he was very into saving money for his future self, which is fantastic. I think because his parents hadn’t done a very good job and so sometimes we see that mental shift, right? Where you see your parents do something and you want to do the opposite and so on and so forth. And in this case, that was a good thing.


Mark: So very cool question. Thanks so much for submitting that. Hopefully that helps you out a little bit and keep listening to the podcast. We certainly appreciate it. And let’s do one more guys before we wrap up here, [just 00:15:13] go around, and we’ve got one from Patty. You guys got to put on your counselor hats here. Patty says, “My husband and I argue almost every day about money because we haven’t done a very good job planning for our retirement and it stresses us both out. Is this a normal thing between spouses or do we need some serious help?”


Nick: So I’ll jump in on this one. So, there’s a couple of things here. So the first thing is that this points out specifically the importance of a plan. And what we mean by that is that when there’s not a clear picture of what people actually have, what their life actually looks at, when there’s a high amount of uncertainty on the future, that’s when there’s often anxiety and bickering, arguing those sorts of things when it comes to money.


Nick: And so, step number one is take an inventory, build a plan. So once that’s done, if it is truly terrible, then you can fight, but at least let’s figure out what’s there. But all joking aside, so then the next step is to kind of come to grips with the fact that, hey, we are where we are today. There’s nothing that we can do about it. If we can focus on the future and start making decisions that are positive and maybe make some changes that’ll be helpful, then that’s great.


Nick: From our perspective as advisors, one of our kind of golden rules, and we oftentimes tell clients this is that, we can’t care more about your money and your situation than you do. So ultimately it has to start at home and then they have to be willing to take guidance and advice and make changes. And then really what we found is that in 12 to 24 months, the momentum can be significant in a positive way. And things can really swing strongly. And once that happens, it becomes kind of addicting. It’s kind of like when you’re in your early twenties, for most people maybe they’re just starting out at the first job and the first time you started to hit a few thousand dollars in your account that stays in your account, maybe 5,000 is your threshold and you’re like, “wow, this is great.” I’ve never had this amount of money in here before.


Nick: And then maybe down the road you hit 10 and as you get older that number changes. And what’s interesting is that it also becomes more stressful and you kind of get this hoarding mentality where once you hit these certain thresholds, 50,000, a 100 thousand in your savings account. Once get there and you realize the comfort and the peace of mind that it provides, you never want to go back. And so we like people to kind of get that, to taste that so that they can understand that. And then usually it’s full speed ahead.


Mark: Yeah, no, that’s a great way of looking at it. My daughter, she’s still pretty young but is definitely, she kind of got that. She was constantly just spending her check and spending all her money when she wasn’t making too much. And then once she got started getting a decent check in from the Navy and she got a couple of bonuses and she put it in there and she watched her account grow, she was like, “wow, this is-” and so now she’s gotten bitten by this bug to kind of see what she can get the number to. She’ll message me every so often, “The number is this now. And the number’s that now.” And so I’m like, “Hey, cool. You’re 24 years old. You got a long time for that to grow and compound.” So yeah, it definitely can be addicting.


Mark: And of course, if you’re closer to retirement and obviously that sounds like that’s the case for this question. I think that’s a great piece of advice. Find out what you got, get an assessment, get a plan put together, look at it. And then see, you guys might be fighting over nothing too, so think about that. You guys could possibly be in much better shape than you even realize. And therefore you’re fighting for [not. 00:18:55]


Mark: So reach out and have a conversation with the guys. Just give him a jingle and call them at (813) 286-7776, or stop by the website, pfgprivatewealth.com. And that’s going to do it this week for the podcast. Again, don’t forget to subscribe to us on Apple, Google, Spotify, iHeart, Stitcher, or whatever platform you like to use. You can find it all at the website, pfgprivatewealth.com. For John and Nick, I’m Mark, we’ll see you next time here on Retirement Planning – Redefined.


Nick: Go Bills.