Ep 47: Understanding Financial Jargon: Investment Terms You Should Know

On This Episode

There are some important terms you’re going to come across as you prepare for retirement. Having a basic understanding of these will help you achieve financial success, so we’ll cover what they mean and what you should know on today’s episode. And don’t worry. We won’t go quite so far down the rabbit hole where we expect you to be able to explain how a company’s P/E ratio meshes with it’s Alpha and Beta ratings to determine how much stock you should buy.

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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:


Mark: Hey everybody welcome into the podcast. Thanks for hanging out with John and Nick and I, as we talk about Retirement Planning Redefined here on the podcast. As always, don’t forget to subscribe to us on whatever platform you like to use. Find all the information you need at pfgprivatewealth.com. That’s the guys website pfgprivatewealth.com. Lot of good tools, tips, and resources to be found there. We’re going to have another conversation today about some financial jargon. This is more kind of investment terms you might want to know or have heard and maybe you want to get a better understanding on, especially if you’re sitting down and you’re shopping for a professional or something like that. You want to kind of understand some of these things that you’re talking about. Now we’re not going to go super deep. We’re not going to get into PE ratios and alphas and betas and all that kind of stuff, but we’re going to keep it kind of high level. So we’ll jump into that this week on the podcast, Nick, what’s going on, buddy? How you doing?


Nick: Pretty good. Pretty good. Staying busy. We’re recording this, just kind of closing up tax season. So happy that that is over for-


Mark: I bet.


Nick: Everybody that is at least not filing an extension.


Mark: Yeah.


Nick: But yeah, it’s obviously a lot going on in the world. So it’s been keeping us pretty busy.


Mark: Yeah that’s true. Very true. John, what about you buddy? You glad tax season’s over?


John: Yeah. Yeah. It’s a fun kind of hump to get over.


Mark: I like that little pause. It’s fun. Yeah.


John: Yeah. So, no, it’s good. It’s kind of a mark that people have on their calendar, so that’s over with, and really we start to kind of get busy afterwards.


Mark: Yeah.


John: Because a lot of people kind of delay meetings until after tax season, so excited to get back at it. And then also excited that NBA playoffs started. So Boston Celtics are playing the Nets right now.


Mark: Alright now, there you go.


John: Gearing up for that, so-


Mark: There you go. Very good. Well we probably should have done a show really on tax planning versus tax preps right after tax season because really tax planning is something you should be doing all year long with your retirement professional anyway, but we’re not going to do that this week. Maybe we’ll do that here in the next couple of weeks, we’ll come up and do something.


Mark: But for now let’s talk about some terms that people hear and probably should know. Maybe you know, maybe you have that kind of cursory high level view, whatever the case might be. Maybe you don’t. So let’s talk about a few of these. Let’s kind of start with fiduciary guys. And this is a term that I think people should know. They should know what it is. I kind of wish, and I was thinking about this before we started that our politicians had to do what fiduciaries have to do, right? They have that legal, moral, ethical responsibility to do what’s right for their client AKA us as American citizens. I wish our politicians had to be fiduciaries, but either way explain what it is and maybe a little bit of the difference between that and like suitability.


John: Yeah. So fiduciary, especially in our world’s investment advisor, it’s where the fiduciary is obligated to put the client’s best interests ahead of their own. So really looking to do what’s best for the client, regardless of any other factors. And what you mentioned there with as far as, how does that compare to suitability, where kind of like a broker has to recommend something that’s suitable for the client, so there’s a big difference when you start to kind of analyze that is something might be suitable for you, but it might not be the best thing for your situation.


Mark: Right.


John: Or maybe there’s other things out there that are better. So fiduciary has the due diligence and say, “Hey, I’m making this recommendation. And based on my expertise, my knowledge, everything I’ve compared it to this is what I believe is the best for you.” And also if there’s any conflict of interests for the advisor as a fiduciary, they must disclose that to you upfront.


Mark: Yeah.


John: So one thing, what people really need to do when they’re interviewing advisors or kind of taking that step to try to find someone to work with, it’s really one of the first questions should be asking. I’d say the good thing is the industry is really going in this direction-


Mark: Mm-hmm (affirmative).


John: Over the last, decade or so. It’s really been kind of going, fiduciary, fiduciary, so that’s.


Mark: Making that the standard, making it more the standard?


John: Yeah. Yeah, no, I think that’s a great point. So if I’m getting this right, then maybe to kind of break this down for people, and Nick feel free to chime in, but so if there’s three options available, suitability would say, “Hey, any of these three technically work for my client, but this one actually pays me better or there’s a reward of a trip or something like that attached to it.” You’re not doing the wrong thing by picking that. It’s still suitable. Whereas a fiduciary has to go with the absolute best thing for the client period. Is that a fair way to break that down in layman’s terms?


Nick: Yeah, I think that’s a pretty fair way to kind of break it down and it can get tricky because when you really get into the nitty gritty in theory, people can argue about what’s better now versus what might be better down the road and that sort of thing.


Mark: Right.


Nick: But if anything, I think what’s important for people to understand is the conflicts of interests, the potential conflicts of interest and where they come from. So, if you’re working with an advisor that is tied in with a parent company that has proprietary products, then they’re probably not able to function as a fiduciary. So-


Mark: Gotcha.


Nick: Understanding that there’s a conflict of interest, a potential conflict of interest, there is just something that people should ask about so that they understand it. It can be from experience just kind of chatting with people. It can get a little overwhelming for people to kind of really drill down understanding the difference between fiduciary and standard versus a suitability standard. But people oftentimes understand conflict of interest. And just to kind of piggyback a little bit on your short little rant earlier about politicians, many people would be shocked to know that many politicians are able to invest in companies even though there may be conflicts of interests.


Mark: Yeah.


Nick: And the fact that’s able to happen. And there’s some websites that track those sort of things, but oftentimes they’re privy to information that will impact a company in the marketplace and they’re able to take advantage of it even though, the rest of the country can’t do that, so-


Mark: Yeah, I was just even talking financially. In just their basic decision making when they pass laws.


Nick: For sure. For sure. But that’s a good example of them not passing laws that-


Mark: True.


Nick: Aren’t good for everybody.


Mark: Well and to John’s point, so there’s nothing wrong with asking, right? When you go in and sit down with someone, you just say, “Hey, are, are you a fiduciary?” Right? That’s a fair question, and there’s nothing wrong with asking that.


Nick: Agreed.


Mark: Yeah. Okay. All right. So let’s move on to the other big term right now that everybody’s getting hit over the head with, on a regular basis, and that’s inflation. At the time we’re doing this podcast guys, the CPI numbers came out a couple of weeks ago for March, pretty ugly. Gross is a term that has been thrown around quite a bit some of these numbers, 8.5% on the inflation, we’re talking what 48% on gas, 35% up on used cars, food 13 to 17% up. So inflation break it down a little bit.


Nick: Yeah. So inflation has to do with spending power of money. And so one of the easiest ways for people to kind of think about it is, you mentioned food for example, one of the things that we kind of joke around with people is they were able to a couple years ago, do you remember when you could walk out of Publix and get everything you needed for 70, 80 bucks versus it now costing 100, $120 for the same amount of stuff. And the tricky thing with inflation is that it’s there on a consistent basis year to year, but every 10 to 15 years, it kind of creeps up on us. And then we realize, Hey, this is kind of annoying.


Nick: And then obviously we have times we’re in right now where there’s some hyper inflation and kind of pocket books are getting hit. The one thing that I would say just to kind of pour some water on it is that although there are some real substantial issues that people are dealing with, there are some kind of, I guess, what we would almost call acute factors that are having an impact on it, that we would hope subside to a certain extent within the next year or two. But also there are going to be ramifications that we’re already starting to see where the FED is doing things to try to combat inflation, like increasing interest rates, which we’re kind of already on the docket, but has been getting pushed down. The cans been getting kicked down the road for a while.


Nick: And so things like mortgages, mortgage rates are now I think mid fives I read, whereas a year ago, closer to three. And I was just having a conversation with somebody to kind of put that in real world numbers. A half a million dollar mortgage at rates a year ago, a half a million dollar financed amount is from a monthly payment standpoint is equivalent to around 370,000 now, or if you look at it inverse half a million dollar mortgage at current rates is going to cost you around $700 a month more than it was a year ago. So that’s going to have a real impact on housing prices and a lot of other things as well. So those are some real world examples of how inflation kind of impacts our life.


Mark: All right. So yeah, obviously we’re hyper aware, we’ve talked about it before a little bit, but inflation we always kind of think of, at least I do it anyway, like calories, right? We know it exists and we don’t often put a lot of thought into it until it’s slapping us in the face, so to speak. And it’s definitely doing that right now, so a lot people very concerned about that. So when we are talking about that, what happens is you start thinking, well maybe I should take a little more risk or whatever the case is with my portfolio to try to outpace inflation or keep up with it or whatever the case is, especially in these crazy times. So that leads us into risk tolerance guys. So what is your risk tolerance? And is that a wise move to try to take on more risk to combat something? Usually it’s not.


John: No, it’s not. And this is one of the most probably important things in building a portfolio that someone should really take a look at, and it’s often overlooked. So risk tolerance is, to kind of bring it down to the simplest form is how much loss is an investor willing to take in their portfolio? How much volatility can they tolerate? So one of the things that we do when we are building a portfolio for our clients, the first thing actually is we have them go through a risk tolerance questionnaire to determine, are they conservative, moderate, aggressive? And from there we really help us design the portfolio so that way we can kind of match up the expected volatility of the portfolio with kind of what they could bear.


John: Because one of the worst things you could do investing is jumping around. And I hate to say it seeing a little bit right now I’ve already kind of feel a few phone calls I’m like, hey what should we do with the market? And if this volatility’s already got you nervous and it hasn’t really, it’s been a pullback but it hasn’t been anything too significant.


Mark: Right.


John: You really need to take a look at am I invested correctly because as we all know, as you shift to conservative or to cash, and then the next week the market just rally up and all of a sudden you just lost all. You realized your losses and didn’t get to recover from it.


Mark: Yeah, knee jerk reaction is not the best right now. Right?


Nick: Yeah. And I would even jump in with that too going along with what John said where I think we have hit that point where people have forgotten what it’s like to have bad markets, or even a normal market cycle of having a negative year. Even during COVID when the markets pulled back, 35, 40%, they bounced back by the end of the year. So it was never really realized. There was a short period of panic, but the recovery was quick, but.


Mark: Mm-hmm (affirmative).


Nick: There’s a lot of people that don’t remember that hey, there are going to be years where the market is down 10% for the year, the whole year. 12 whole months, so that’s something that’s interesting that’s happening right now that we’re seeing. Plus, historically where people would shift would be to fixed income or bonds. And that’s not necessarily a safe place right now, either. So we’re kind of in this, almost unicorn phase that only comes along every 50 or 60 years where there’s not a lot of opportunities in many places. And so there’s going to definitely have to be some patience involved-


Mark: I like that.


Nick: In the next 12 to 18 months.


Mark: Yeah. I like the unicorn phase. That’s a good way of putting it. It’s definitely been interesting, that’s for sure. So do you guys kind of with the risk tolerance, is it kind of that number kind of system? Do you guys do that risk tolerance kind of thing where you kind of give someone almost like sleep number, if you will. If you’re 100 or if you’re a 20, how does that work?


John: Yeah. So how we do it and I’ve used actually some programs that do that. They give you a risk number based on how you answer questions. We have a set of some pretty good questions that give us an idea of what that person can kind of stomach.


Mark: Okay.


John: And what their expected return is. It’s really, when you start to break it down, it’s a lot of the same questions just asked differently to really kind of understand how the person ticks.


Mark: Yeah.


John: So we do a real good job of figuring that out. And then as advisors, part of our job is to make sure we put them in the appropriate portfolio based on how they answer.


Mark: Yeah. Because it’s pretty easy to say conservative, and you go, what does that even mean? Right? Or I’m moderate.


John: Yeah.


Mark: Well what does that mean? That’s probably a wide window, right?


John: It is.


Nick: Yeah. And then I would say one of the things that without it sounding like a commercial for ourselves, one of the things that we do that’s a little bit different than some places that we do have what’s called like a tactical tilt to how we manage money, where if we do have significant concerns, we will tamp down the risk. So maybe if somebody’s normally in a portfolio that’s a 50/50 mix stock to bond and what we would consider a moderate portfolio, if we have significant concerns in the market, we may drop them down to 30% on the stock side of things in certain cycles where we have high concerns. So sometimes what we found is that helps allay some fears for some people that there’s some proactive potential changes, where if we really feel like it’s going to hit the fan, we will make that change.


Mark: Right. Okay. So risk tolerance, another big one then definitely making sure that you’re having that proper risk tolerance for yourself, especially in these inflationary times. When it becomes, it’s hard to not feel, I think as humans, we feel like if we don’t do something, we’re doing something wrong or we have to take action or therefore we’ve made a mistake. And sometimes doing nothing can be a smart move. Especially in volatile times when it comes to a financial standpoint, if you don’t know the correct answer, making no move might be a good place to start at least. That way you’re not having that knee jerk reaction. And then of course, talk with a professional. Get some advice, and get a good strategy in place so that you know the right moves to make at the right time. Let’s do another one here, guys, another technical one, dollar cost averaging, what is that?


Nick: So dollar cost averaging is the easiest example that most people have exposure to on a regular basis. And they don’t probably realize that they’re doing it is when people are contributing to their 401k. So every two weeks, a certain amount of your paycheck goes into your 401k and you have a set allocation and you are buying in to that allocation at whatever price it’s at that point in time. So the thought process with dollar cost averaging is that you are balancing, you’re investing over a period of time. Where sometimes you’ll be buying at a premium, sometimes you’ll be buying at a discount, but the objective is to continually invest and make sure that you are not trying to time the market.


John: And part of that is also what we’re finding with the current market where it’s at, with people with money on the sidelines, it could be a good way to kind of take some of the risk of putting all your money into the market and all of a sudden it dropping. So there’s a strategy to basically say every, if I have 100,000 I want to put into the market every month or so, I’m going to be putting in 10 grand into it. That way, if it does dip down immediately, I only have $10,000 at risk. So dollar cost averaging, as Nick mentioned, most people are doing the 401k, not knowing it, but if you have money on the sideline in a volatile market, or if you’re nervous, it is a good way to kind of get money that was on the sideline into the market.


Mark: Okay. All right. Well let’s do one more guys and we’ll wrap it up this week. Asset allocation, another big term we hear. We probably get that tossed around a little bit. Give us the kind of high level view of what that is. And because often I think people wind up feeling like they have a whole bunch of one thing and they’re diversified because they’ve, I don’t know, for example, I’ve got a whole bunch of mutual funds, so therefore I’m good. So explain what asset allocation is and is that correct? What I just said, is that really diversified or not?


John: Yeah. So asset allocation’s kind of taken diversification to a different level. You could have seven different mutual funds, but if it’s all the same type of funds, for example, like a large cap growth fund, they’re going to do the same thing in reality when the market goes up or down. So when you do asset allocation, you’re spreading your money, your portfolio within different asset classes, such as large cap stocks, small stocks that Nick mentioned, fixed income earlier, cash, some alternatives.


John: So what you do there is when you’re building a portfolio and again, starting with your risk tolerance and your goals, you determine, hey my risk tolerance is X, here’s my goals. I should be in a, let’s just call it in income in growth portfolio. Well, what’s the right mix of asset classes to make that work and to kind of bring it down to layman’s terms here? Imagine kind of cooking, you’re making recipe for a pie. The pie has certain ingredients to make it work and make it taste good. And that’s basically what you’re doing in your investments. It could be 20% large cap, 5% small cap, 20% fixed income, and our job as advisors and wealth management is we build that portfolio for the client if they hire us to do so.


Mark: Gotcha. Okay. All right. That’s a good way of breaking that down. You just think about like a pie. So, and who doesn’t love pie? So there you go. All right guys, thanks so much for the conversation this week. Good stuff talking about these technical terms, some jargon here. Hopefully we kept that pretty high level and it helped out with some of the things that you might be thinking or hearing. And if you’ve got questions, definitely reach out to the guys.


Mark: As always, before you take any action sit down. If you’re already working with them, maybe share this podcast with someone who might benefit from it. If not, if you’ve been listening for a while, just reach out to them, have a conversation, and chat with them for yourself. You can find all of it at pfgprivatewealth.com. That’s their website pfgprivatewealth.com. They’re financial advisors at PFG Private Wealth, which makes a lot of sense. So make sure you subscribe on Apple, Google, Spotify, all that good kind of stuff. That way you can catch past episodes as well as future episodes. For John and Nick I’m your host, Mark. We’ll catch you next time here on Retirement Planning Redefined.

Ep 46: The Most Important Birthdays In Retirement Planning

On This Episode

There are certain age milestones where you should really pay attention to your retirement planning progress. On this episode, we’ll look at the most important birthdays as you approach retirement and cover the exact things you should be checking off your to-do list at each age.

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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 into another addition of the podcast. This is Retirement Planning Redefined, with John and Nick and myself, talking investing, finance, retirement, and birthdays.


Mark: We’re going to get into important birthdays in the retirement planning process. As we get older, I don’t think any of us really want birthdays, but these are some things we need to know. They’re pretty useful. Some of this is pretty basic. Some of this stuff’s got some interesting caveats in it as well. So you might learn something along the way. It can go a long way towards that retirement planning process.


Mark: We’re going to get into that and take an email question as well. If you’ve got some questions of your own, stop by the website, pfgprivatewealth.com. That’s pfgprivatewealth.com.


Mark: John, what’s going on, buddy? How you doing?


John: A little tired. Got woken up at 2:00 in the morning with two cranky kids.


Mark: Oh yeah.


John: So if I’m a little off today, I apologize.


Mark: There you go. No, no worries. You get the whole, they climb the bed, and then you’re on the tiniest sliver?


John: I got one climb into bed, I think kicked me in the face at one point.


Mark: Oh, nice.


John: Another one climbed into bed missing out on the other one, because they share a room. Then I had the sliver. I woke up almost falling off the bed.


Mark: There you go. And usually freezing because you have no blankets.


John: Yeah, yeah.


Mark: That’s usually the way it goes. Nick’s sitting there going, “I don’t know what you guys are talking about.”


Mark: What’s going on, buddy. How you doing?


Nick: Yep. No. Pretty low maintenance over here.


Mark: Well, that’s good. Hey, don’t you have a birthday coming up?


Nick: I got a couple months still.


Mark: Okay, a couple months.


Nick: Yeah, I just got back from a trip a few weeks ago. Some buddies that I grew up with, a group of us have been friends for a really long time, I guess, going back to middle school. We’re all turning 40 this year, so we rented a house in Charleston, and all survived.


Mark: Nice. There you go.


Nick: Yeah. It was good.


John: This is how you know Nick’s turning 40. He came back with neck pain.


Mark: Exactly.


Nick: Yeah.


Mark: Hey, when you start to get a certain age, you start going, “When did I hurt that?” It’s like, “I didn’t even do anything.” Yeah. You don’t have to do anything.


Mark: Well, you know what? That’s a good segue. Let’s jump into this.


Mark: We’re going to start with age 50. I turned 50 last year. First of all, the thing that sucks is you get the AARP card. I don’t know about all that. That’s annoying as a reminder that you’re 50.


Mark: But the government does say, “Hey, let me help you out a little bit here if you need to catch up on some of the retirement accounts, help building those up.” Talk to me about catch up contributions, guys.


Nick: Yeah. Essentially what happens is when you hit 50, there’s two types of accounts that allow you to start contributing a little bit more money. The most basic one is an IRA or a Roth IRA, where the typical maximum contribution for somebody under 50 is 6,000 a year. You can add an additional thousand to do a total of 7,000 a year. The bigger one is in a 401(k) or 403(b) account, where you’re able to contribute, I believe it’s an extra 6,500 per year.


Nick: This is also a good flag for people to think about where, hey, once that catch up contribution is available, it’s probably a good time, if you haven’t done any sort of planning before, to really start to dial in and understand your financial picture a little bit more. Because if you talk to anybody that’s 60, they’ll tell you that 50 didn’t seem too far back. So that’s a good reminder to dig into that a little bit.


Mark: Yeah. It adds up. It’s not necessarily chicken feed. You might hear it and think, “Well, a thousand dollars on this type of account over a year, or 6,500 on the other type of account, whoopedidoo.” But if you’re 50 and you’re going to 67, let say, for full retirement age, and we’ll get to that in a little bit, that’s 17 years of an extra seven grand. It’s not exactly chicken feed, right?


Nick: No. It’s going to be big money down the road.


Mark: Yeah, exactly. So that’s 50.


Mark: John, talk to me about 55. This one’s really similar to 59 and a half, which most of us are familiar with, but most people don’t understand the rule at 55. So can you break that down a little bit?


John: Yeah. We don’t see people utilize this too often, but an example would be let’s say you’re 50, 55, 56, and for whatever reason, you leave your current job. You have an opportunity, at that point…


John: Let’s give a bad scenario. You get laid off. If you didn’t have a nest egg saved up in savings, there’s an opportunity to actually access some money from your 401(k) plan without penalty. What you’ll do is, basically, you take the money directly from the plan, and you just have it go to your bank account, and the 10% penalty’s waived.


John: Now, some people need to be careful with this. Once you roll it out to an IRA, this 55 rule here, where the 10%’s waived, ceases to exist. It has to go from the employer plan to you directly in that situation. It’s a nice feature if someone finds themselves in a bad situation, or they need access to money, and the 10% penalty’s gone, but you still have to pay your income tax on that money [crosstalk 00:05:03]


Mark: Of course. Yeah. That caveat being, it’s only from the job that you’ve just left, right? It can’t be from two jobs ago kind of thing. It’s got to be that one that you’ve just walked away from, or been asked to leave, or whatever the case is. That’s that caveat.


John: Correct.


Mark: It’s basically the same rules, Nick, as the 59 and a half. It’s just is attached to that prior job. But 59 and a half is the more normal one. What’s the breakdown there?


Nick: Yeah. Essentially what happens is, at 59 and a half, you are able to take out money from your qualified accounts while avoiding that penalty without any sort of caveats. One thing to keep in mind is that usually you’re taking it out from accounts that…


Nick: For example, if you’re currently employed, the process of taking it out of the plan where you’re employed can be a little bit different, but it’s pretty smooth and easy if you have an IRA or something like that outside of the employer plan.


Nick: One other thing that happens in most plans, for people at 59 and a half, is, and we’ve seen it a bunch lately, where a lot of 401(k) plans have very restricted options in fixed income and those sorts of things, where most or many plans allow people to take inservice rollovers, where they’re able to still work at their employer, but roll their money out of the plan to open up some options for investments outside of the plan.


Nick: That’s not always the best thing for people. Sometimes the plans are great. Fees are really low. Options are great. So it may not make sense, but oftentimes people do like having the option to be able to shift the money out without any sort of issue.


Mark: Okay. All right. So that’s the norm there. You got to love that half thing. You always wonder what the senators or whoever was thinking when [crosstalk 00:06:56]


John: Finally, they got rid of the 70 and a half [crosstalk 00:06:58]


Mark: Yeah. They get rid of that one. Yeah. We’ll get to that in just a minute as well.


Mark: John, 62, nothing too groundbreaking here, but we are eligible finally for Social Security. So that becomes… I guess the biggest thing here is people just go, “Let me turn it on ASAP versus is it the right move?”


John: Yeah. So 62, you’re now eligible. Like you said, a lot of people are excited to finally get access to that extra income. You can start taking on Social Security.


John: Couple of things to just be aware of is, any time you take Social Security before your full retirement age, you will get a reduction of benefit. At 62, it’s anywhere, depending on your full retirement age, roughly 25 to 30% reduction of what you would’ve gotten had you waited till 66 or 67.


Mark: They penalize you, basically.


John: Yeah.


Nick: Yeah. Actually, if you do the math, it ends up breaking down to almost a half a percent per month reduced.


Mark: Oh wow.


Nick: Yeah. It really starts to add up when you think about it that way.


John: Yeah. We always harp on planning, so important if you are thinking about taking it early, once you make that decision, and after a year of doing that, you’re locked into that decision. So it’s important to really understand is that best for your situation.


John: Other things to consider at this age, if you do take early, Social Security does have what they call a earnings penalty slash recapture. If you’re still working and taking at 62, a portion of your Social Security could be subject to go back to them in lieu of, for a better term, [crosstalk 00:08:27]


Mark: It’s 19,000 and some change, I think, this year, if you make more than that.


John: Yeah.


Mark: Yeah.


John: Yeah. Anything above 19,000 that you’re earning, 50% goes back to Social Security. [crosstalk 00:08:36]


Mark: Yeah. For every two bucks you make-


John: 5,000 goes back to Social Security. So that’s really important.


John: Something that I just want to make, last point on this, is that earnings threshold is based on someone’s earned income, and it’s based on their own earned income, not household. That comes up quite a bit, while people say, “Well, I want to retire and take at 62, but my husband’s still working. Am I going to have a penalty if I take it?” The answer is no. It’s based on your own earnings record.


Mark: That’s where the strategy comes into play too. Because if you are married, then looking at who’s making more, do we leave one person’s to grow, as we’re going to get into those in just a second, to grow towards that more full number.


Mark: Again, that’s all the strategy. It may make sense for one person to turn it on early, and the other person to delay it. That’s, again, part of the strategy of sitting down and talking with a professional, and looking at all the other assets that you have, and figuring out a good move there.


Mark: Nick, let’s go to Medicare. 65 magic age.


Nick: Yeah. Actually, my dad turns 65 this year. So we’ve been planning this out for him. He is a retired fireman, so he has some benefits that tie in with his pension.


Nick: One of the things that came up, and just something that people should think about or remember, even if they are continuing to work past 65, is it oftentimes makes sense to at least enroll in Medicare Part A. You can usually enroll as early as three months before your birthday. The Medicare website has gotten a lot easier to work with over the last year or two.


Nick: Part A, the tricky thing is that you want to check with your employer, because usually what happens for the areas that Part A covers, which is usually hospital care, if you were to have to be admitted or certain procedures, it’s figuring out who’s the primary payer, who pays first, who pays second. So making sure that you coordinate your benefits. Check in with HR, if you’re going to continue to work.


Nick: If you are retired and are coming up on that Medicare age, make sure that you get your ducks in a row so that you do enroll. Most likely you’re going to start saving some money on some healthcare premiums.


Mark: Technically, this starts about, what, three months early? It’s a little actually before 65. I think it’s three months when you got to start this process, and three months before and after.


Nick: Yep. Yeah. You can typically enroll three months before your birthday, and then through three months afterwards. There can be some issues if you don’t enroll and you don’t have other healthcare, at least for Part A. There can be penalties and that sort of thing.


Nick: Frankly, with Medicare and healthcare in retirement, this is a space that we typically delegate out. We’ve got some good resources for clients that we refer them to, because there are a lot of moving parts, and it can be overwhelming, especially when you start to move into the supplements and Advantage plans, and all these different things.


Mark: Oh yeah. And it’s crucial. You want to make sure you get it right. A lot of advisors will definitely work with some specialists, if you will, in that kind of arena. So definitely checking that out when we turn 65.


Mark: Again, some of these, pretty high level stuff, some of this stuff we definitely know. But we wanted to go over some of those more interesting caveats.


Mark: Let’s keep moving along here, guys. Full retirement age, 66 or 67. John, just what? It’s your birthday, right?


John: It is your birthday. That’s the time that you can actually take your full Social Security benefit without any reduction, which is a great thing to do. Then also that earnings penalty we discussed earlier at age 62, that no longer exists. Once you hit your full retirement age, 66 or 67, you can earn as much as you want and collect your Social Security. There’s no penalty slash recapture.


John: When that happens, people have some decisions to make. If they’re still working, they can decide to take their Social Security. I’ve had some clients that take it, and they use that as vacation money. I’ve had some other ones take it, and they take advantage of maxing out their 401(k) with the extra income. Or you can delay it. You don’t have to take it. You get 8% simple interest on your benefit up until age 70.


John: So full retirement age, you got a lot of big decisions to make, depending on your situation. But you want to make sure you’re making the best for what you want.


Mark: Definitely.


Nick: Just as a reminder to people that that 8%, and you had mentioned it, but it does cap out at age 70. So there’s no point in waiting past 70, because it doesn’t increase any more.


Mark: Right. Thanks for doing that. It wasn’t on my list, but I was going to bring it up real fast. So yeah. People will sometimes email and they’ll say, “Hey, I want to keep working past 70. How’s that affect Social Security.” It’s like, “Well, you’re maxed out, so you got to just go ahead and get it done.” You can still work if you’re feeling like it. Your earnings potential is unlimited, but it’s just a matter of you’re not going to add any more to it. So I’m glad you brought that up.


Mark: John, you mentioned earlier, they got rid of the other half. Thank God. The 70 and a half thing, just because it was confusing as all get out. They moved it to 72.


Nick: Yeah. Required minimum distributions, as a reminder for people, are for accounts that are pre-tax, where you were able to defer taxation. 401(k), traditional IRA, that sort of thing. At 72, you have to start taking out minimum distributions. It starts at around 3.6, 3.7% of the balance. It’s based on the prior year’s ending balance. It has to be taken out by the end of the year.


Nick: An important thing for people to understand is that, many times, people are taking those withdrawals out to live on anyways. So for a lot of people, it’s not an issue at all. However, there are a good amount of people that it’s going to be excess income.


Nick: Earlier mentioned, hey, at age 50, really time to check in and start making sure that you’re planning. One of the benefits of planning and looking forward is to project out and see, hey, are these withdrawal going to cause you to have excess income at 72, where maybe we’re entering into a time that tax rates could be higher, tax rates could be going up, which is fairly likely in the next five to 10 years. So if we know and we can project that, then we can make some adjustments to how we save, should you be putting more money into a Roth versus a traditional, and how we make adjustments on the overall planning.


Nick: So making sure that you understand how those work, and then the impact that it has on other decisions to take into account for that situation, is a huge part of planning.


Mark: Definitely. Those are some important birthdays along the way. You got to make sure you get this stuff done. 72, there’s the hefty penalties involved if you don’t do that. Plus you still got to pay the taxes. All this stuff has some crucial moments in that retirement planning process, so definitely make sure that you are not only celebrating your birthday, but you’re also doing the right things from that financial and that retirement planning standpoint along the way.


Mark: Again, if you got questions, stop by the website, pfgprivatewealth.com. That’s pfgprivatewealth.com. You can drop us an email question as well, if you’d like. That’s what we’re going to do to wrap up the show right now.


Mark: We got a question that’s sent in from Jack. He says, “Hey, guys. I’ve thought about meeting with a financial advisor to plan my retirement, but I’ve never used a budget or anything like that before. So I’m wondering, should I budget myself for a couple of months before I meet with a professional?”


Nick: Based upon experience, putting expense numbers down on paper is one of the biggest hurdles for people to get into planning. But with how this question is phrased, I would be concerned, because it’s kind of like the situation of starting a diet. You start a diet. You’re going to eat really good for two to three weeks. You’re trying to hold yourself accountable. You’re functioning in a way that isn’t necessarily your normal life.


Nick: One of the things, as advisors, that we want to make sure that we understand are what are you really spending. It’s great to use a budget, but if you’re budgeting to try to look good in the meeting, which we’ve seen happen, you’re painting a false picture, and you’re not letting us know what the finances actually look like.


Nick: So I would actually say to put down the real expense numbers in place, let’s see what it really looks like, and then if we need to create a budget after we’ve created a plan, then that’s something that we can dig into.


Mark: Yeah. John, let me ask you, as we wrap this up, sometimes people associate seeing a professional financial advisor with a budget. Also, people have a cringe to the B word. They think, “Well, I don’t want to live on a fixed budget,” or something like that.


Mark: That’s not necessarily what we’re talking about, right? That’s not probably what Jack is referring to. He’s just trying to figure out, I guess, more income versus expenses, right?


John: Yeah, yeah. The first step is to analyze your expenses. That could be what he’s referring to as far as, “Hey, should I take a look? Should I get my expenses down before I meet with someone?”


John: I’d agree with Nick, even if that’s what you’re looking at, versus the budgeting, I would say no. I think the first step is sit down with an advisor, because they can assist in categorizing the expenses correctly based on today’s expenses, versus what expenses are going to be at retirement.


John: I think it’s important just to get going rather than trying to prep. Because we’ve seen a lot of people that have taken … They’ve been prepping for years to meet. That’s years where they haven’t done anything, and they’ve, unfortunately, lost out on some good opportunities, otherwise, if they just said, “Hey, I’m going to sit down first, see what’s going on.”


Mark: Yeah. It gives you that built-in excuse.


John: [crosstalk 00:18:26]


Mark: It gives you that built in, “Well, I’m not quite ready.” Well, you might never be ready if you play that game. Especially a lot of times when it’s complimentary to sit down with professionals, have a conversation. Most advisors will talk to you, no cost or obligations. So why not right? Find out. Just get the ball rolling. That’s the first step. It’s usually the hardest part too.


Nick: Yeah. One thing that we typically tell people is that we are not the money police. We are not here to tell you that you can’t use your money the way that you want to use it.


Nick: The way that we view ourselves, and what our role is as an advisor, is to help you understand the impact of decisions. Whether those decisions have to do with spending money, saving money, whatever, it’s to make sure that you understand the impact of your decisions so that you make better decisions. That’s it.


Mark: There you go. Yeah. It’s your money, at the end of the day, your call, but certainly having some good, well, coaches in your corner, if you will, advisors to help advise, that’s the whole point. But I like that. Not the money police.


Mark: All right. That’s going to do it this week, guys. Thanks for hanging out. As always, we appreciate your time here on Retirement Planning Redefined. Don’t forget. Stop by the website.


Mark: If you need help before you take any action, we always talk in generalities, and try to share some good nuggets of information, but you always want to see how those things are going to affect your specific situation.


Mark: If you’re already working with John and Nick and the team at PFG Private Wealth, fantastic. Then you already have a lot of this stuff in place. But if you have questions, or you’re not working with them, or you’ve come across this podcast in whatever way, or maybe a friend shared it with you, definitely reach out and have a chat. pfgprivatewealth.com. That’s pfgprivatewealth.com. Don’t forget to subscribe on whatever podcasting platform app you like to use.


Mark: We’ll see you next time here on the show. For John and Nick, I’m your host, Mark. We’ll catch you later here on Retirement Planning Redefined.

Ep 43 : Don’t Fumble Your Retirement In The Financial Red Zone

On This Episode

In football, teams are extra careful not to make a mistake when they get within about 20 yards of scoring points (known as the Red Zone). They’ve typically worked hard to get to that point and don’t want to cost themselves by throwing an interception or fumbling the ball and giving it to the other team. On this episode, we’ll explore the financial equivalent of the Red Zone and discuss how you can really mess things up if you’re not careful during this phase of your life. If you’re approaching retirement, this is a fundamental conversation you won’t want to miss.

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More Episodes

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:


Marc Killian: Hey everybody. Welcome back into the podcast. It’s time to talk football a little bit here on retirement planning, redefined with John and Nick. We always talk finance, investing finance and retirement, and we’re still going to, but we’re going to talk about not fumbling your retirement in the financial red zone. We are in the playoffs at the time we are dropping this. Now we are recording just before they’re starting. They’re starting this weekend. And so this will come out while the playoffs are rocking and rolling, but that’s all right. We’re still going to talk about this analogy, because it works really well for this time of year. And we’ll get into that in just a second. But first let me say, Hey to the guys.


Marc Killian: Nick, what’s going on, buddy? How you’re doing?


Nick McDevitt: Good.


Nick McDevitt: This was a good reminder to ask John on when I’m going to get paid for my second place finish in the Fantasy Football League.


Marc Killian: Nice.


John Teixeira: I don’t know what Nick’s referencing here. We do not gamble here, so I’m going to give Nick a nice handshake and pat in the back for drafting the second best team in the league.


Marc Killian: There you go. Okay. Well what’s going on with you, John. You’re doing all right?


John Teixeira: Doing good. Trying to get some recapping from our last session of their great resignation, and actually trying to get some contractors to send me an estimate based after they came to my house has been a challenge.


Marc Killian: Right? I know.


Marc Killian: I was talking with some contractors not too long ago and they’re like, right now, all I got to do is show up and I get like 50% of the jobs, you know?


John Teixeira: Yeah.


Marc Killian: And, they’re not wrong, you know? So there’s a lot going on. Well, I know you guys are both football fans and guys both come in from the same division, actually. We got a Patriots fan and a Bills fan. So living in Florida, which is interesting, and especially considering that you got radio right around the corner now, but either way, we’re going to talk about this financial red zone and football and a little analogy to go back and forth. And as I said, the games are starting for the playoffs and you guys are going to be actually competing against each other. Your teams will be anyway. So we’ll have some fun with this. So do me a favor real fast. John, I’ll let you start. Tell me what’s the financial red zone? Go ahead and talk about the football red zone if you want as well. I think most people know it, but just real quick and then tell us what the financial equivalent is.


John Teixeira: Yeah. Football red zones, when you get 20 yards of scoring. So, right before the end zone, really important place to be efficient, making sure that everything’s tightened up. The defenses plays a little bit harder here because the shorter field. So just really important to make sure the offense is doing their best and making sure everything’s done right, which leads into what we call the financial red zone, where we would consider that last 10 years before retiring and can range for five to 10 years after retiring, but the analogy goes well where. This is probably the most important part of your retirement is making sure that, Hey, you got 10 years left or you’re five, 10 years into it. You cannot make a mistake.


Marc Killian: Yeah.


John Teixeira: And it’s important to make sure everything’s lined up and you’re being as efficient and careful as possible to make sure you hit all your goals and maintain the lifestyle that you want going into retirement.


Marc Killian: Yeah, for sure. So it has been pretty easy. Right? So just think of it like that, same scoring red zone. Now maybe you’re not trying to score necessarily in the financial red zone as you’re talking about retirement, but there are some things to pay attention to because turnovers, as you mentioned with the football analogy are more critical. So Nick give us some reasons why people need to pay attention to that?


Nick McDevitt: Yeah. There’re a few things here and obviously it’ll all depends on the plan, but in many ways, from an accumulation standpoint, time is no longer on your side. The goal is obviously to save as much money as you can. And once you get into that 10 year window, hopefully you’re in your higher earning years and you’re able to save more money. Maybe there’re less kids on the payroll, et cetera. And it’s also important from the standpoint of the money that you’ve saved up to that point, making sure that it’s invested properly, it’s a lot easier to have a half a million dollars double in the last two years than it is to have a hundred thousand dollars catch up to $500,000 or things like that.


Nick McDevitt: So, that’s some money that you’ve been able to build up once you’ve entered into that red zone and then how that money’s going to accumulate, leading up through retirement is an important time. So, really making sure that your decisions are coordinated together and you’re not really just, Hey, I just saved this amount of money and I put it into this, and I don’t pay attention to it. Usually isn’t the best sure strategy.


Marc Killian: Yeah.


Nick McDevitt: It’s just much more difficult to recover from mistakes that are in this period.


Marc Killian: Yeah. So, If you’re in a good place, right, this is when a lot of times teams will start looking at taking the knee, right? If you’re in a good spot from a financial standpoint, you want to start taking that victory formation because you’re trying to protect the ball. And John, I’ll go to this next one, but I’ll make you happy by bringing something up here when you’re talking about, some of the mistakes that you see people make getting a little too risky. Think back to that Seahawks Patriots game, Super Bowl, a few years back, I think it was 2015. Right? And the whole world knew the Seahawks were going to punch that in with Marshawn Lynch, running on the one yard line, but they took a risk. They threw it and they got intercepted and it cost them the Super Bowl.


John Teixeira: Yeah. That was a big risk.


Marc Killian: Right. It sticks in my mind seven years later, right?


John Teixeira: Yeah. It’s funny. I watched some of the man of the arena with Brady, it’s been background noise at this point just when I’m doing stuff around the house and they replayed that. And it was interesting to hear the people talk about it, but yeah, that was a big risk. And that’s a big mistake that we see for clients when they’re nearing retirement is they are taking too much risk and that can happen quite a bit in your 401k, because you’ve just picked a fund when you first started at that company.


Marc Killian: Right.


John Teixeira: And typically everyone unfortunately chases returns in their 401k. They just look at a fund and say, this did, will they pick it? But as you’re getting that red zone, it’s important you evaluate what you’re in because if you’re taking too much risk and we have a 2009 type recession, it takes a little bit to fully recover from there never mind that you got the mindset of, Hey, I just lost 30% of my portfolio.


John Teixeira: I don’t want to lose any more. Should I get more conservative? Which will seep into people as you get closer to retirement. So if you make that shift and get conservative, market bounces back within a two year period, you miss a majority of that recovery. So important to make sure that how much risk you’re taking your portfolio is the right amount of risk for you and your plan. We go back to, again, the planning, having the right distribution strategy, as you’re in the red zone, very vital to your retirement success and scoring.


Marc Killian: Yeah. Well, Nick, before I go to the next point here, I’m going to give you a chance on this as well, because if you think about, what he was just talking about, making sure that your portfolio’s not taking too much risk. This market is on a 12 year run. It makes it really enticing and really hard for us to not go. I can eek out a little more. Right? I can squeak out just a little bit more, but that’s when you start putting more at risk on the table.


John Teixeira: Yeah. And you know, because ultimately what ends up happening is what we’re trying to do is, is manage decision making and what ends up happening. And the reason that we try to de-risk a little bit in the situation is so that there’s not an overreaction. So, the easiest way to prevent an overreaction for an individual is to have a plan. So you can remind yourself of, Hey, this is why I’m doing what I’m doing. And you have something to go back to show you, Hey look at, this plan tells me that if I do X, Y, and Z, that I’ve got a pretty solid chance to have a comfortable and successful retirement. And, if you’ve got ice water in your veins and you can handle, a 40% dip in a year and something in a year that where things happen chaotic and it doesn’t even blip your iWatch then that’s one thing, but most people can’t.


John Teixeira: And when that feeling of anxiety starts to creep in, as you start to log in your account more because we’re going through a pullback happens and it pushes you to make a poor decision. That’s when the snowball starts rolling down the hill and that’s where we can really get into trouble.


Marc Killian: So, well, even if you’ve got ice water in your veins, there’s a good chance, your significant other doesn’t, right?


John Teixeira: Yeah.


Marc Killian: Oftentimes there’s that split in the investing philosophy many times where one is a go getter and one is a bit more conservative. So you want to make sure you’re just not taking too many chances in the red zone. If you got a good plan, you got a good strategy. Your team is so “winning the game,” then again, consider taking that knee, take that victory formation, at least start hedging your bet, that way you’re not going to have too much at risk because you got to still outpace inflation. That’s a given, but you also don’t have to necessarily continue to throw the ball, 40 yards down the field.


Marc Killian: So for those that are paying attention, John, that are being proactive, why is retirement planning easier for those folks once they do get to the financial red zone?


John Teixeira: Yeah, I’d say the biggest thing we see when someone goes through a planning process and they get to see it, it provides them a blueprint and a roadmap of what they can expect. And that roadmap of blueprint really gives people a little bit peace of mind so they can see the cash flow, they can see the money and it really comes down to, they can see their goals and what they want to do. So it makes it come to life. So that makes a little bit easier versus the unknown of, Hey, you try building the house without a blueprint, it makes a little bit harder. Right? So, the financial plan is that blueprint and just gives people peace of mind, which ultimately they make better decisions.


Marc Killian: Yeah.


John Teixeira: So you can look at things, income stream, social security, when is the best time to take it or my pension options. When you have the plan, you can test those. So you feel confident in, Hey, I already looked at this and I know what to expect. What’s the best option for me in my family and what we’re doing. So, the plan is key in making sure you make sound decisions and it provides people, again, sound like a broken record or a peace of mind that what they’re doing is right.


Marc Killian: Yeah. Definitely. Any couple of little bullet points Nick to toss in there.


Nick McDevitt: Yeah. I would just say that, the people that are doing well are the people that are able to zero in, in this financial red zone. Part of the reason is because everything starts to feel a little bit more real. Sometimes people have a really hard time thinking about 30 years down the line.


Marc Killian: Right.


Nick McDevitt: And the numbers seem out of whack and the variables seem super unpredictable, and things like that. So oftentimes once we’re in that zone, we have a good idea of what the numbers are going to look like from an income stream standpoint, whether it’s the social security or you have a pension or Hey, there’s lead at the end of the tunnel of having the mortgage paid down, or the kids are going to be off the payroll in two years and that’s going to free up X amount of income per month to be able to save. So, you feel there’s hope and momentum on the side and the people that do well with planning, they really lean into that and are really able to take that momentum and move themselves forward strongly.


Marc Killian: Yeah. So let’s not fumble the football in retirement, the financial football, if you will, if you got some questions, need some help, you should know what to do by now. Hopefully you’re already working with John and Nick. There’s a good chance of just catching this because you already are. And you’re checking out the podcast and you get the information. But if not, definitely stop by and reach out to them at pfgprivatewealth.com. That’s the team’s website, a lot of good tools, tips and resources at pfgprivatewealth.com. And you could drop us a line as well. We take email questions. Of course, they all get answered, but we also take some from time to time here and use them on the show. And that’s what we’re going to do to wrap things up.


Marc Killian: So, whoever wants to tackle this, no pun intended, go for it. My brother tells me that I have way too much money in the bank and he’s probably right. I got about $150,000 sitting in there now, but I just like knowing if there in case I have an emergency, this is Frank by the way. And so Frank says, is it really that bad to have that much in my savings account, take it away.


Nick McDevitt: So, this is an interesting question because oftentimes for most people, the answer might be yes. However, the thing to remember and what we try to harp on with people is that, it doesn’t necessarily matter what your brother, your sister, your mailman, your coworker, your dog walker, everybody’s willing to give their opinion or their advice on financial topics. And it’s important to take your situation, put in a perspective. If you’re somebody that makes $300,000 a year, then maybe that 150 is a good amount. If you’re somebody that makes $40,000 a year and you’ve got 150 in cash, then there’s a good chance that you’re not saving into things that have more upside and more growth for you. You probably have been a little bit wary of the market or didn’t know how or where to invest.


Nick McDevitt: And there’re things that you can do. Maybe you’ve never saved to a Roth before and we could start putting money into a Roth. Maybe you haven’t adjusted your 401k contribution in eight years. And that’s part of the reason that this money is saved up. So, there’re ways that we can take a portion of it and save it into vehicles and then maybe adjust. One of the things that we’ve seen is adjusting from here, moving forward. So in other words, it might make you very uncomfortable to take a hundred grand out of that 150 and put it to work, but maybe we can take 25 and put it to work, but also we’re going to aggressively save moving forward with the income that you have and and figure out where that pain point might be to put money away.


Marc Killian: Yeah.


Nick McDevitt: So it really is a function of what your expenses are. Things like, do you have dual income in the house? Is the house paid off? Dual income, you could probably have a little bit less in there. If the house is paid off, definitely put more money to work. So, it could be, but just like everything else that we talk about, it depends. And the easiest way to really truly answer that is to look at it through the lens of the plan and go from there.


Marc Killian: Well, I guess I would say John, probably what’s your definition of liquid, right? In getting to it, obviously a lot of people see, they want to see a certain number. I’d ask myself if I was Frank, what kind of emergency constitute 150 grand and/or what do you consider liquid, right? If it’s something you need to get to within three to five days, often there’re many types of accounts you can do that. It doesn’t have to just be money in the bank.


John Teixeira: Yes. So, liquid would. A lot of different people view it differently. So one would be, Hey, I can get access to this without any penalty. And that would be number one of being liquid. Another version would be, Hey, I can get this without any penalty or taxes, you know? So that could be another version of someone considering it liquid, but yeah, there’re different buckets to choose from when you need access money. And it’s important you work with an advisor to figure out what are the penalties and very important what are the tax consequences for accessing this cash?


Marc Killian: Yeah. Okay. Well, Frank, thanks so much for listening. Hopefully that helps you. I know you how you don’t want to admit your brother’s right. So technically you don’t have to. So if you’re like me, I never want to tell my brother he is right. You can just certainly say it depends. Right? So everybody’s situation is different. That’s going to do it this go round for the podcast. Don’t forget to subscribe to us again at pfgprivatewealth. That’s where you can find all the things from the team at pfgprivatewealth, which is John and Nick’s company there. So find it online at pfgprivatewealth.com.


Marc Killian: We’re going to wrap it up, but guys, I’m going to give you a chance to say what you think is going to happen for the Super Bowl since we’re dropping this beforehand, who’s winning the Super Bowl this year? John go.


John Teixeira: Good question. I’m going to have to say, I think the 49ers might win.


Marc Killian: Okay. All right. He’s calling the 49ers. Nick, who you’re going with, buddy?


Nick McDevitt: I’ll go with the Packers.


Marc Killian: Wow. Neither one of you guys took the team.


John Teixeira: I was going to go with the Packers, but Adam Rogers always chokes him.


Marc Killian: He does play.


John Teixeira: He is like notorious for NFC championship game. Let me play awful. Last year I think Brady threw three picks in the second half or third quarter or something.


Marc Killian: Yeah.


John Teixeira: And he couldn’t capitalize on it or fourth quarter, whatever it was. I don’t know.


Marc Killian: There you go. Well, folks, let us know what you think. And we’ll be back with more on the podcast in February. So probably after the Super Bowl. So, we’ll see if the guys are right and we’ll talk to you next time here on retirement planning, redefined with John and Nick.

Ep 41: Opportunities For Retirement’s Late Bloomers

On This Episode

Maybe you’re close to retirement and think you don’t have nearly enough money saved. But let’s talk about some reasons that the news might not be as bad as you think.

Subscribe On Your Favorite App

More Episodes

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 into another edition of the podcast. It’s Retirement Planning Redefined with John and Nick, Financial Advisors at PFG Private Wealth. You can find them online at pfgprivate wealth.com. That’s pfgprivatewealth.com. A lot of good tools, tips, and resources there as well as a way for you guys to find the podcast, listen to past episodes, subscribe to it, all good kind of stuff. We are going to talk about opportunities for late bloomers in retirement this go around on the podcast. [inaudible 00:00:28] what’s going on? John, how are you, buddy?


John: I’m good. How you doing?


Mark: Hanging in there. Not doing too bad. Hope things are going well for you. Nick, you doing all right, my friend?


Nick: Yep. We’ve had some nice fall weather here lately, so I’ve been enjoying that.


Mark: There you go. Humidity finally-


John: Yeah, I get to put a hoodie back on and no humidity


Mark: Vacation [crosstalk 00:00:47].


John: By enjoying, Nick means he’s just open up his balcony door versus going outside.


Mark: Gotcha. Let the wind in. All right. That’s all right. Hey, I’ll take it. That’s good. Let’s talk about these late bloomers here. Maybe you’re close to retirement and you think you don’t have nearly enough money saved. We mentioned that on the prior podcast a couple of weeks ago. That’s often the case with people. They feel automatically like well, I know I don’t have enough, even though you have no idea because you’ve never sit down and done a plan and gone through a process to try to find out, but let’s just assume that you don’t have nearly enough or you think you don’t. There’s some good news. There’s some places we could actually gain some ground pretty quickly.


Mark: Guys, I’ve been using this analogy for this. I turned 50 this year and Memorial Day is kind of the unofficial kickoff to summer. It’s not actually summer, but everybody just kind of treats it like it is. It’s kind of how summer starts. 50 seems like the unofficial kickoff to retirement because it’s when you start going, I better get serious. Right? When people turn 50, they start to think about this a little bit more. Catchup contributions is a great way and you can make some serious dent in the savings that you need with some of the things that government allows us to do once you turn 50. Talk to me about that.


John: Once you turn 50, you can do catchup provisions, which if you have a individual or retirement account, AKA IRA, you can put an extra 1,000 into it if you’re above the age of 50. If you got yourself and a spouse, it’s an extra two grand you can put in there. Most people, where we kind of maximize the strategy is in the 401k where you can actually do an additional 6,500, which is a nice way to not only save, but also reduce your taxes. With the 401k, it’s pretty easy because you just contact your payroll provider or go online where your investments are and a couple of clicks and there you go. As we say, once it’s done through your payroll, it’s easy to just set it and forget it. You just adapt to what you have as your net income moving forward. Definitely once you hit age 50 something, you need to start consider just saving more to hit your goals in retirement.


Mark: Oh, yeah. I mean, $6,500, that’s not chicken feed, especially over, let’s say, 15 years. If you’re 50 and you’re planning to retire at 65, that can add up. That can make a nice dent in catching up from being behind. Now, I know you don’t have kids to speak of. John, your kids are too little just yet, but kids coming off the payroll, this is something you guys still deal with. You have a lot of clients that, when you get 50 plus, hopefully you’re making the most money in your life that you have. Usually that’s the case for a lot of people when they’re in 50 plus. As my dad used to call us, biscuit snatchers, come off the payroll because we’re no longer doing things like the car insurance, cell phone. As a matter of fact, my daughter’s out working and doing things as a young adult and she’s actually paying the cell phone bill for her mom and I, so how about that?


Nick: This is interesting. I would say that over the last, probably six, seven years, we’ve seen this get pushed back a little bit where it tends to be the kids start to come off the payroll with clients that are in their early 60s, but it’s substantial and it’s usually a huge relief. We’ve got clients that have been able to bump up their savings by 1 to $2,000 a month with kids graduating from college or whatever it may be. It makes a huge difference, whether it’s saving more money, whether it’s using that additional money to maybe help you achieve the goal of paying your mortgage off by the time you retire. Recapturing those funds is a really, really big deal. When they come off the payroll, just figuring out a way to try to recapture at least 50 to 60% of that could make a huge difference to help somebody catch up.


Mark: John-


John: You like that term biscuit snatcher, don’t you?


Mark: You like that?


John: You used that in one of our workshops, so…


Mark: That’s what my dad used to call us because he loved his biscuits and I was always running and snatch one and take off with it. You’re going to get this at some point, John. Obviously, you do this for your clients. You help them navigate this now, but with your two little ones one day, you’ll be having all these extra things and then they’ll come off the payroll. I mean, it could be sizeable. You could be paying their car payment, their cell phone, car insurance, maybe some health insurance, so it adds up.


John: I actually just experience some of that because… And my wife works. She’s just actually wrapped up her master’s program for nurse practitioner, but we had a nanny for that period and that just stopped. That just freed up some cash flow, which was pretty significant for us, but so I know the feeling of it.


Mark: A lot of places and a lot of opportunities for “late bloomers” in retirement to gain ground if you’re behind. Another one, guys, is disappearing debt. Maybe you’ve got some things… Again, we’re going to use this analogy of the 50 range, like 50 to 60. You’re getting into that pre-retirement stage. You’re trying to make sure you’ve got enough. My wife and I just got our boat paid off, just I think last month or two months ago, something like that. She just paid off her car. Now, she’ll probably get another one between now and the time we get to retirement, but still, you get the idea. Credit cards, things like that, that stuff’s really starting to dwindle down. [crosstalk 00:05:56].


Nick: Being able to recapture those is a big deal. The car thing is still an interesting thing just from the perspective of growing up up north and you have to deal with rust and the wear and tear of winters have on cars and all that, whereas down here in Florida, they can last so much longer. That’s a good example of something that people are able to leverage to help recapture some money to save. Like you said, that mortgage going away, getting that paid off or eliminating that credit card debt. I’ve had a few clients that in the last 12 to 24 months, they’ve been able to wipe out debt that they had had from… One was healthcare related and a couple of other things. Being able to redirect that money and that’s always the key is to recapture and redirect. That can make a big, big difference.


Mark: Especially the credit card stuff because there’s the whole bad debt, good debt thing. Take those high interest things first and get rid of those. Since we mentioned the home, that’s another place, so maybe a downsize is on the radar. In this area, a lot of people doing the condo kind of thing. Maybe you don’t want to do the big house. Maybe you’re moving from up north, Nick, to your point a minute ago. The difference is maybe you want to think about it from a everything needs to be on the first floor because my knees can’t handle the stairs standpoint. Either way, prior to recently now… Recently, the housing market’s been pretty crazy, so selling it, you might get a lot of money, but you also might pay a lot of money for the next place, but it could be potentially a place where you could capture some more gains as well.


Nick: Replacement cost is high right now, but downsizing can definitely be something. We’ve had a few clients do that recently. We’ve also had some clients, and this is a good reminder of the… For example, we’ve got one client that has had a beach rental that they’ve been using to rent out Airbnb for a while. They’re going to take advantage of the market by selling their primary residence at a pretty high number and then going ahead and no longer renting out the Airbnb rental and moving into that space. That’s something that they’re able to take advantage of.


Nick: Then not only that, but from a strategy standpoint, there’s that capital gains exclusion that’s out there where a married couple can exclude up to $500,000 of gains in a property. They’re able to exclude the gain in their primary residence and then we went through and reviewed that if they then live in the rental that would’ve been previously the rental, if they live in that for two years and then sell to maybe shift into another property, that they can exclude the gains in that if they wait the two years. There’s some strategy that can get involved in that space to help you on taxes and help you also downsize.


John: One thing with the downsizing, and we’ve run into this a couple of times where I would say just be careful with downsizing because we’ve had some scenarios where someone thought they were downsizing and when we started to really evaluate the costs of everything, it really wasn’t much of a downsize.


Mark: Good point.


John: It needs to makes sense, especially when you take in account, property taxes here where you can homestead and when you move, you can transfer it over, but sometimes you don’t get the biggest bang for your buck. It’s just as important to really evaluate the new house. Does it need renovations? Things like that. The maintenance costs, and that’s where you always go back to the plan when making these type of decisions because we’ve seen scenario areas where someone wanted to, we actually evaluate it and it’s like that doesn’t make sense to do it.


Mark: Another great point. There’s so many reasons to consider it. Obviously, there’s the financial potential as we’re talking about this particular go around, but as I mentioned, it could also be something where you need to simply because you cannot physically handle the house anymore. You got to take a lot of those things into consideration, but right now, we’re talking about how to use the money to gain ground. It’s just another way you could potentially make up some of that if you’re a late bloomer. Then the final one is maybe the twilight career. If you want to find a silver lining through all this pandemic stuff, it’s the fact that the world has definitely embraced telecommuting from work, or just all kinds of different really, jobs and things that you could do remotely. Maybe you do need to make some ground and maybe you can’t do the full corporate job or whatever it was that you were doing as your main career, but a twilight career could be there. You could be selling your crocheting stuff on Etsy or whatever. You could be consulting just from your kitchen.


Nick: We’re in an era where workers have a little bit more power right now post and I guess still on the tail end of COVID. We’ve had clients that have been able to… Sometimes we call it the make my day strategy where they’re important to the company. They know it and they go through and they negotiate. They’ve been working from home, at least for a portion and they’ve still been productive, so they’ve gone to their employer and said, “Hey, if I can work from home three days a week, I’ll continue to stay here for X amount of time,” or just using some of the stuff that’s going on as leverage because companies are having a really difficult time hiring. It’s become very, very competitive. We’ve had some clients go ahead and use that to their leverage. Then like I said, it’s just they take advantage of that until they’re no longer happy and then they exit.


John: We’ve seen a lot of people a little different where they start working part-time and really start getting into hobbies that they enjoy for income, photography, event planning, things like that. There’s definitely a lot of different avenues you can go in this period of time here because we’ve seen quite a few people churn hobbies into income.


Mark: That could be a great way to not only offset the shortfall you may have or even whatever the case might be, but it’s also just something to do. I mean, just keeps you active so why not “double dip”? Get something out of it. You’re getting some activity, something you enjoy, but also adding a little something the to the income levels.


Nick: I was going to also mention that where one thing that we have found from some people is not having a purpose or a routine has been very difficult.


Mark: Oh, yeah.


Nick: Some people handle it better than others, but in general, people need some sort of purpose. Some people are able to take that extra time, spend it with kids, grandkids, travel, do all these different things and they’re very comfortable or they have an active social life and it works out well. A lot of people got a lot of those interactions via work, and so not having them anymore, spending an extra 40 hours a week with their spouse, as much as they love them can be a little bit much. Whether it’s volunteering, whether it’s finding something, just having an open mind and looking for something that fulfills you and gives you purpose is a really big deal.


Mark: You got to have something to retire to as well, otherwise you just turn into a couch tater and you don’t want to do that. Those are so some places where you can make up some ground if you are a late bloomer in retirement, meaning basically you feel like you started too late or you don’t have enough put away. Of course, how do you know? Well, you know by getting a plan put together to see if you are even behind because again, you might not be. Reach out to the guys, to the team at PFG Private Wealth. Stop by the website, pfgprivatewealth.com. Get scheduled to come in for a consultation and find out, first of all, even if you are behind and if you are, then you can look at some of these options and some of these opportunities that we highlighted today on how to make up that ground, pfgprivate wealth.com. That is pfgprivatewealth.com. Don’t forget to subscribe to the podcast while you’re there on Apple, Google, iHeart, Spotify, whatever platform you like to use. You could find it all at the main website, pfgprivate wealth.com.


Mark: While you’re there, you can drop a line as well and we take those from time to time here on the show. Let’s wrap up with an email question from Elizabeth. She says, “Guys, I have a pension fund from a previous job in a different state. It’s been sitting there for years, but I do have the option to take the lump sum and invest the money myself, or just leave it there and get the monthly pension once I retire. Thoughts?


John: This is coming up quite a bit lately with pensions offering these lump sum payouts for participants. It really important to evaluate if you take that lump sum, what type of income could you expect from it on a, basically, lifetime basis. What goes into that is really your risk tolerance. What could you expect to achieve from a rate of return based on how much risk you want to take? Again, you want to look at this from a conservative standpoint. What we’ve done in the past with clients, we might compare it to maybe doing their own type of guaranteed income stream through some other financial vehicles and see is it similar and maybe provide some more flexibility they’re comfortable with, the financial health of the current pension. I wish there was an easy answer for this, a yes or no, but as always, it depends on your plan and your situation, and what works for you and, and your family if you have beneficiaries. There’s a lot of different factors that go into this.


Nick: Testing it through the plan’s so important, especially John alluded to the beneficiary aspect. For example, we’ve had a fair amount of clients that maybe they’re single, whether it’s widow, divorce, whatever, and their beneficiaries are their kids. The thought of having worked for a company for a prolonged period of time and what would be a substantial pension. Their kids not being able to benefit from that at all if they were to pass away early doesn’t sit well with them. They’ll look for alternatives. There are a ton of factors that go into that, but comparing and using realistic variables when you’re making those comparisons is really important.


Mark: I mean, it’s one of those things where a lot of times, you do have more controlling options if you take the money in lump sum and do it yourself, but it’s not the right fit for everybody. Definitely a great question. Reach out and call the guys and have a one on one conversation or share some more details for sure. 813-286-7776 is how you can get ahold of them if you’ve got questions of your own, 813-286-7776 or again, stop by the website, pfgprivate wealth.com. That’s all our time this week here on the podcast. We appreciate you guys as always, for John and Nick. I’m your host, Mark and we’ll see you next time here on Retirement Planning Redefined.

Ep 40: Quit Cutting Corners In Your Financial Plan

On This Episode

It can be tempting to cut corners as you make your retirement plan – but those decisions can often turn into a huge inconvenience, if not an outright disaster. We’ll go over some common ways people cut corners in their financial plan, and what you should be doing instead.

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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:


Marc Killian: Hey, everybody. Welcome to the podcast. Thanks for tuning in to Retirement Planning – Redefined with John and Nick here from PFG Private Wealth. Going to have a good conversation, as we usually do, about investing, finance, and retirement, and cutting corners. Quit it, stop that. You don’t want to cut corners when it comes to your financial plan. So we’re going to look at a few ways that people try to do that. And the guys will give us some feedback on why that is not a good idea.


Marc Killian: And we are moving right along here in the year, it’s just winging by. So how you guys doing, everything going all right?


Nick McDevitt: We’re getting ready for approaching the holiday season here. Usually these last couple months of the year just fly by, just end of the year stuff and get through the holidays.


Marc Killian: John, how about you, buddy?


John Teixeira: Doing good, yeah. Doing good. Actually this morning I picked up my wife and kids from the airport and I like to think I saved someone’s life. Some guy fell on the escalator and couldn’t get up so I had to run there and help him up. So I did my good deed for today.


Marc Killian: Fantastic. Nice. I’ll tell you what, those things, man, they can hurt. You get trapped on one of those things-


John Teixeira: Oh no, he’s okay, but he’s definitely scratched up. And when I grabbed him, his head was like on the bottom and I was having flashbacks of seeing those things where people kind of get knocked out. So I was just trying to keep his head up. But he ended up getting up all right.


Marc Killian: All right, well, let’s get into some cutting corners here, guys. There’s no cutting corners when it comes to the financial strategies because, again, it’s not a good idea. So where we typically see this stuff is taking too much risk when you’re trying to make up for the perception of being behind. And I think that’s the reason I wanted to frame it that way, is a lot of times people come in for a review, their first time sitting down with an advisor, guys like yourselves. They think, most people think, they are actually in worse shape than they are, but often fairly pleasantly surprised. So you could be taking risks when you don’t even need to.


Nick McDevitt: Yeah. I would say that one of the… and some people do end up coming through the classes that we do and maybe they are a little bit behind. But the thing that we try to emphasize with people is that just like many other things in life, we can’t change the past and regrouping and just making decisions based upon where you are now and moving forward is important. And being able to show them via the planning about the things that they can do to catch up, because you’re right, that perception, there are a lot of people that have that, some that are doing okay, some that are maybe a little bit behind. But usually when they’re behind, they just don’t know what they can do to get themselves caught up.


Nick McDevitt: And oftentimes if they are behind, taking more risk doesn’t really make a huge difference because they haven’t accumulated enough money for that risk to benefit them yet. So yeah, that’s usually not the way you want to do it. And the good thing about planning is that we can really kind of illustrate like, “Hey, if you are a little bit behind here, there are decisions that you could make that can get you ahead.” And when we work with people, those decisions don’t ever include taking more risk than they should.


Marc Killian: Gotcha.


Marc Killian: John?


John Teixeira: Yeah. I would jump in on that. And we do hear that a little bit and it’s a bad idea to go ahead and start taking too much risk just to try to catch up because when you find yourself in the wrong portfolio based on your risk tolerance, you could really make bad decisions. So example, market dips, and let’s say, you’re a conservative investor and you say, “I got to get more aggressive.” And all of a sudden, you’re in an aggressive portfolio, the market dips. And it’s like, “I can’t take this,” and you bail, you leave the strategy. And the next thing you know, as we all know, in a couple of weeks, or a month or so, it bounces back up and it’s like, “Okay, you just lost out on some stuff there.”


Marc Killian: Yeah, especially in the environment that we’re in right now because we’re not sure what’s going to cause a downturn at some point, but certainly we’re overdue, I mean, just from a historical standpoint. So if you’re take too much risk and then one of these different things we’ve got going on out there, it’s a very volatile time, you don’t want to be caught holding that bag, per se. So definitely having a plan and getting a strategy put together and making sure that you’re not taking too much risk for the type of portfolio that you need and can handle is certainly a good idea. So don’t cut that corner.


Marc Killian: Another one is legal documents, guys, not getting these put in place. This one just frustrates me because it’s super easy to do and it’s often not that costly. And a lot of these things you can just handle them pretty quick and it saves a whole lot of heartache for a loved one down the way.


John Teixeira: Yeah, this is really important. It is one of those things that, it’s not expensive to put in place, but it’s just one of those things that are on your to-do list for a while and it just never really gets done. But that’s something we try to make sure we’re active with our clients in making sure they have the right documents in place because we’ve seen scenarios where someone passed away and they didn’t have the documents. And it was just really, I won’t say it’s a nightmare, but it was very difficult for the beneficiaries to track things down. And I’d say especially in the case of a second marriage where you have maybe two sets of kids, one on each side, it’s even more important to make sure that you have the right documents in place and that your assets are going where you want them to go. So we can’t stress that enough.


Marc Killian: Yeah, not getting organized, Nick, that’s another one that people cut corners. It’s easy, just throw it all in a box here, kind of thing.


Nick McDevitt: Yeah. Yeah, I would say many of us struggle with this sort of thing in some part of our lives.


Marc Killian: Oh, sure. We all have a junk drawer, right?


Nick McDevitt: Yeah, for sure, a junk drawer for something, that’s for sure. Now whether it’s, up north, it was basements-


Marc Killian: A junk basement.


Nick McDevitt: Yeah. Yeah. And down here, we just try to find anywhere to put it, but-


Marc Killian: The closet.


Nick McDevitt: Garage.


Marc Killian: The one closet no one opens because they’re afraid it’s all going to come falling out, yeah.


Nick McDevitt: Exactly. So one of the things, and obviously we talk a lot about our emphasis on planning, but for example, the software that we use and what we try to emphasize with people is that, “All right, you’ve taken all these steps to get started with planning and it’ll be a little bit intensive to get rolling, but once we get everything all set up and put together, then in the platform, the client platform that we use, it allows them to upload important documents. It allows them to link all their accounts together which usually helps push them to consolidate a little bit. And they really like the fact that they can log into one place and see all of their accounts in one spot. We’ve got clients that will bring in their kids and we can create a separate login for their kids and only have a certain amount of access so their kids know where things are.


Marc Killian: All right. How about number four here on my list, guys, ignoring details about certain investments. Whether that be, “Don’t talk to me about X, Y, or Z product because I have no interest in it,” or maybe thinking something is everything you want, but you really didn’t do that much research on it. You’re just like, “Oh, that looks good. Give me that.” Don’t cut the corner of not understanding what you have.


John Teixeira: Yeah. That’s really important to understand what you have and we always harp on the plan, but really getting a grasp of what you have and how does that implement into your financial plan, so it’s really important.


Marc Killian: What do you have and why do you have it?


John Teixeira: Exactly. What’s the goal for this? What’s it doing for me? How does it operate, and what you just said there about the biases of certain investment vehicles. Really, before you shut the door on things, again, everyone’s situation’s different, you should probably be open to understanding how that works, and ultimately, how can that benefit you and help you reach your goals and give you peace of mind. Everyone’s situation’s different, but can’t stress enough, understanding what you have or what’s available to you to help you hit your goals.


Marc Killian: Exactly. My brother is a anti Ford guy. He will not drive a Ford, look at a Ford, ride in a Ford, nothing, to the point that I’m like, “Really, man? This is a strange bias.” And it’s just one of those things, he can’t really explain why. He just, “They make some really nice looking cars, but I don’t want to even check one out.” And I’m like, “Why? You’re just limiting yourself.”


John Teixeira: I’m assuming he’s a Chevy guy?


Marc Killian: Oh yeah, exactly, yeah.


John Teixeira: It’s interesting. It’s one or the other with [crosstalk 00:08:19].


Marc Killian: Yeah, exactly. But people do that. They get these weird biases, and it’s like, “Don’t talk to me about this because I won’t pay attention to it.” And it’s like, “Okay. But you could be cutting something out that’s very helpful. So just don’t do that,” Especially when we’re talking about financial stuff.


Marc Killian: All right. Well, let’s do some fun stuff here as we wrap things up. We’re going to do a little getting to know you. We don’t do this too often on the show. But I got some fun questions here I’m going to ask you guys. Feel free to answer. We’ll jump in with this first one. What’s the hardest job you’ve ever had? John, you go first.


John Teixeira: In college, I worked couple of summers with a mason. So I was basically lugging around cinder blocks and-


Marc Killian: Yep, laying bricks.


John Teixeira: … and going on scaffolding, which, I’m not afraid of heights, but I also don’t like being up on a scaffold that’s swaying, you know what I’m saying? So I’d probably say that was one of the more difficult jobs I’ve had from a physical standpoint. Yeah, I would never go back to that world of scaffold.


Marc Killian: Nick, you got anything?


Nick McDevitt: Yeah. So honestly, maybe it’s a priority for some people, but getting started as an advisor, it’s a pretty wild world. And so I started back in 2007 without local contacts and not being from the area. And so it was a little bit of a slow start, but something that I obviously really enjoy and still doing. So I’d say, from just getting things going, that was probably the hardest thing. But the good old 16 year old dish washing, and all that kind stuff. That was a different sort of hard, but gave you perspective and tell you the value of the dollar, and all that kind of thing.


Marc Killian: No, that’s cool. Yeah, I like that because, I mean, what you guys do is complicated and getting your licenses and things, it’s serious stuff. So it definitely can be complex. But yeah, the manual labor side, I’m with you there, John, I worked for a construction company as well and did asphalt and, ugh, asphalt that’s a hot job, in the summer, woo, not something I recommend. That’s a tough one. So anybody does that, kudos to you. That is hard stuff.


Marc Killian: All right. Here’s a random silly one. Who’s your favorite TV character, if you have one?


Nick McDevitt: I watch a fair amount of TV, especially working from home. I usually have something going on in the background. And I want to say, two or three weeks ago, Netflix added Seinfeld. And so I went back from the beginning and have been rewatching Seinfeld. I always knew George was hilarious, but he continually makes me laugh. So he’s one of my favorite characters in all of TV in just his mannerisms and all the things that drive him crazy are just really entertaining.


Marc Killian: John, with two little ones, I don’t know if you even have time to watch TV, but if you do, it’s probably some cartoon character like Peppa Pig or something, right?


John Teixeira: Yeah. I’m trying to think what are they watching nowadays?


Marc Killian: SpongeBob.


John Teixeira: Like Fancy Nancy, I think, is what’s on my TV quite a bit or Doc McStuffins turning into my number one there.


Marc Killian: There you go. There you go, Doc McStuffins.


John Teixeira: I would say, I mean, I don’t necessarily have a favorite character, kind of Nick said there, it just depends on what I’m watching, but I’m a pretty big Game of Thrones fan. So I like Tyrion Lannister, his wit and sarcasm is pretty good.


Marc Killian: That’s right. He drinks and knows things, that’s what he says, right?


John Teixeira: Pretty much.


Marc Killian: Yeah. There you go. Well, there you go. Let’s do one more thing. We’ll wrap it up this week with an email question. And of course, if you’d like to submit your own into the show, feel free, or just ask a question period, well, just go to the website, pfgprivatewealth.com to get your questions answered. To get on the calendar to have a conversation about your retirement journey, pfgprivatewealth.com is where you go to make that happen. And you can subscribe to the podcast while you’re there on Apple, Google, Spotify, iHeart, Stitcher, all that stuff. You can find it all right there at the website and get in contact with the guys and the team at PFG Private Wealth.


Marc Killian: And here’s the email question this week, it’s from Wade. And he says, “My wife and I both earn pretty nice incomes and we don’t have any kids and we are only 45, but we think it’s reasonable to look at retirement in 10 years at 55. Any pointers on things to do to make this happen?”


Nick McDevitt: Yeah, I’ll jump in on this one. Sounds a little flippant, but it’s called a plan.


Marc Killian: There you go.


Nick McDevitt: It’s one of those things where instead of… this is a classic example of what we’ve seen in the past in situations like this, and I can almost use a client that we got about five or six years ago. They’re a few years apart and this situation, good income, no kids. They were about 45 and 50 when we started working with them and he retired last year and she retired this year. And it was really the putting the plan together, first letting them know that it was feasible instead of just like in theory, feasible like, “Hey, we’ve done well for ourselves. We think we can do it,” to making it very concrete, creating very specific goals and helping them get there.


Nick McDevitt: And they constantly tell us how big of a difference that made to them in having those specific goals. Because usually what happens in this situation is, somebody’s 45, they ask questions like this. They talk about it with themselves. They talk about it with friends, all of a sudden, it’s five years later, they haven’t done the things that they could have been doing for last few years to hit that goal. And now they end up being behind where they could have been, so the sooner the better.


Marc Killian: Gotcha. And I would think, the one thing that would jump out to me if you’re talking about retiring at 55, would be the healthcare side of things. Like what’s your plan, and that would be part of the plan, right? What is your plan? Because you’re not going to get Medicare for another 10 years until you’re 65, and that could be pretty costly.


Nick McDevitt: Yeah. Yeah, absolutely. The managing of the expenses, especially for people that work for companies that are benefit rich can be a little bit of a shock. So figuring that out and then navigating that space, especially learning some of the rules and where they’re going to generate their income from and how to keep those high healthcare costs down, all that sort of stuff can be a bit of a maze.


Marc Killian: Well, and that’s all part of getting a plan put together, as you said. You said that it’s not really flippant if it’s true, right? So get a good plan together, wait, and have a conversation, reach out for some other pointers and some things to start. If you’re serious about doing this, the longer you wait, the longer it takes to get that put together. So get started with a plan with Retirement Planning – Redefined, and the guys in the team at pfgprivatewealth.com, that’s pfgprivatewealth.com.


Marc Killian: Guys, thanks for hanging out, as always, I appreciate it. John, have a great week.


John Teixeira: You too.


Marc Killian: Nick, we’ll see you next time, buddy.


Nick McDevitt: All right, thanks.


Marc Killian: All right, we’ll talk to you later. Hear all the podcasts. This has been Retirement Planning – Redefined with John and Nick.