The Planning For Retirement Podcast

The financial markets are well known to cause some stress and anxiety, but this escalates even more during a Presidential election. Especially this one which is likely to bring out emotions from both sides. As a result, I felt called to do this episode to provide some facts about how Presidential elections impact the stock market.

I hope you enjoy this episode! Make sure to share it with a friend or family member who might find it helpful! I want to impact as many people as possible with this message!

Thank you!

***Just a footnote here. I mentioned I was recording on video, which I did...However, I do not have time to edit this video in time for the next episode. I am currently working on hiring an editor, and will hopefully be adding video as a feature to tune into the show soon enough!

First and foremost, it's been a whirlwind for the Lao family in March. My financial planning firm just went through its first audit, woohoo! In the midst of all of the heavy lifting preparing for said audit, my wife gets the worst food poisoning of her life. Needless to say, Daddy's daycare was in session for the majority of last week. To cap things off, my oldest son got sick, so I took my twin boys to their first hockey game on Sunday just the three of us. While there, my wife called me with the news that one of our dogs, Guinness, was bitten by a venomous snake. We spent the rest of the day in the ER while he received anti venin and pain meds. Thankfully, he survived and was released the following evening. He's doing much better now, but the pain meds are keeping him up all night with "stomach problems." TMI, but I woke up this morning to prep and record this podcast only to find multiple piles of you-know-what scattered throughout my office. When it rains, it pours!!

But thankfully, I was able to do some prep and record later in the afternoon...so you all BETTER enjoy this episode!

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The issue with getting too conservative too quickly is that you bring inflation, longevity, and interest rate risk into the picture! This is NOT an ideal situation for retirees in 2024!

In this episode, I discuss the three reasons I believe most investors get too conservative too early, my issue with "Risk Tolerance" as the primary driver of asset allocation, and the concept of "Risk Capacity."

Instead of selecting your asset allocation based on how you feel, or overly simplistic rules of thumb, reverse engineer your asset allocation based on your personalized financial goals and "required rates of return!" Meaning, don't invest based on how someone ELSE tells you to invest but invest based on your priorities and values.

A few links I referenced:

The SECURE Act of 2019 was the first major overhaul of retirement plans, specifically 401ks. However, many people are still curious about what the changes are and how they impact these group 401k plans. I had the pleasure of being joined by Alex Jenkins, the Chief Revenue Officer @ Nest Eggs, to unpack all of this for us. You'll be sure to learn a lot whether you are a small business owner, an executive at a privately held company, or you're just interested in the evolution of 401k plans and how to maximize them for retirement.

Links from the show:

Interested in learning more about Nest Eggs?

Contact Alex Jenkins

alex@nesteggs401k.com

904 252 6780 (cell)

Have you heard of the 4% rule?! It's the most recognized benchmark for safe withdrawal rates in retirement. However, it lacks flexibility and often leaves retirees "under-spending," particularly in their prime retirement years.

Think Advisor put out this article (link below) that touched on three alternatives to the 4% rule and how they can potentially increase your spending capacity over time, while also protecting downside risk (outliving your assets).

I hope you enjoy this episode!

According to the Vanguard "Advisor's Alpha" study, asset location can add up to 60 bps in returns on an annual basis! The larger your taxable brokerage account balance, the more you need to pay attention to what investments you own in that bucket!

Conventional wisdom says that the taxable accounts should be tapped into first, and therefore should be the most conservative. However, the result could leave you paying more in taxes than you need to!

This is where proper Asset Location comes into the picture.

I hope you enjoy this episode and make sure to share this with someone else like you!

Housing wealth is one of the largest, if not the largest, assets on the balance sheet for retirees today. However, many retirees simply pay off their mortgage and let their housing equity sit idle.

There's nothing inherently wrong with this line of thinking because being debt-free is often a goal for most people. However, you may want to look at a reverse mortgage as a tool in the toolbelt to achieve your ideal retirement, minimize taxes, and age in place.

Welcome to another episode of The Planning for Retirement Podcast. I'm your host, Kevin Lao!

2020-2023 brought about legitimate market volatility, the first we've experienced since The Great Recession of 2008. I thought I would share some common mistakes I've personally seen retirees make over the last few years to highlight the importance of having a disciplined, unemotional, repeatable, investment process.

I'll also highlight some of the key metrics we are watching in 2024 and how we are currently managing risk in portfolios.

Here are some of the links I referenced in the show:

2023 was an amazing year, and I just wanted to spend some time sharing my sincere gratitude for my listeners, clients, and most importantly my wife, Jessica, for supporting me on this journey.

I also wanted to share a few tax planning observations as we close out 2023.

Here are some links I referenced in the show:

I'm excited to have Brady Slack, the proud owner of High Country Finance based in Utah, join for this fascinating topic. At first, I was planning to steer Brady in two directions with regards to tax planning opportunities for business owners and W2 employees. But, we ended up mainly focusing on using real estate as a nontraditional retirement planning vehicle, and the tax efficiency of leveraging this asset class.

Just a word to the wise, investing in Real Estate is NOT as easy as it sounds. Many of these expert investors have been through ups and downs, and Brady talks about the need to be experienced in order to be successful in this market.

We also talked about a few charitable giving ideas for all taxpayers.

I hope you enjoy this episode!

Here are the details on how to connect with Brady and his team.

We've all heard the sales pitches! "Permanent life insurance solves all of your problems!"

For those of you who have followed me for a period of time know I don't believe this to be true. But at the same time, there is a large % of the financial advisor (and talking heads) population that blanketly tells people, "Don't ever buy permanent life insurance."

To me, this is a breach of fiduciary duty. Just because we all have our biases doesn't mean we should PUSH those biases on someone's personal financial situation. As my friend Cody Garrett likes to say, "Keep Finance Personal."

Most people go into retirement without Long-term Care Insurance. Meaning, they plan to "self-fund" Long-term Care expenses. But really, what ends up happening is that a family member, or family members, will end up providing the care.

In fact, 70% of care provided is done by unpaid caregivers (aka family members).

This goes against what most people's primary goal is in retirement; "Never to be a burden on their loved ones."

The problem is the "self-funding" plan wasn't communicated properly to their loved ones. Or, there was no "self-funding" plan to begin with.

In this episode, we'll dive into the different assets you could tap into during retirement to "self-fund" long-term care costs, and tips and tricks on how to implement your plan while maintaining your dignity (at home!).

Here are a few links referenced in the show:

This is part 2 of 3 in our series, "How to pay for Long-term care costs in retirement."

Rodney Mogen and Peter Ciravalo from BC Brokerage are my guests again today and they bring a ton of knowledge on this topic! There is a reason Hybrid Long-term Care policies now make up the majority of insurance products sold today. However, because there are so many different types of products and how they fit into a client's situation, oftentimes retirees and pre-retirees can feel overwhelmed with where to start.

I hope you enjoy this episode and make sure to hit "FOLLOW" so you don't miss out on part 3, "How to self-fund extended care costs in retirement."

Here is how to get in touch with BC Brokerage!

One commonly shared concern for all retirees and pre-retirees I've spoken to over the years: "Never be a burden on your loved ones."

As we all go through the aging process, the potential need for extended care is more and more at the forefront.

However, many pre-retirees and retirees fail to prepare for this because financial advisors focus more on selling products instead of real planning.

In episode 17, Harley Gordon joined us to discuss the consequences of not planning for extended care.

In this 3 part series (episodes 22-24), we will talk about the three ways to pay for extended care expenses:

Part 1 - Traditional Long-term Care Insurance

Part 2 - Hybrid Long-term Care Insurance

Part 3 - Self-funding extended care costs

In parts 1 and 2, I had the pleasure of speaking with Peter Ciravalo and Rodney Mogen from BC Brokerage. Peter and Rodney have a wealth of product knowledge but with a financial planning mindset.

I hope you enjoy this episode's 3-part series.

Here are a few links we referenced in the show.

The Wall Street Journal just came out with an article called "How to Retire Better, From Retirees Who Learned the Hard Way."

What's interesting is that 2 of the 3 suggestions had NOTHING to do with money or finances! It was all about purpose and relationships. So, this podcast is dedicated to talking about this NON-financial topic, "Purpose in Retirement."

Also, many of you are new listeners whom of course I've never met before! Welcome! As a result, I thought I would share my personal story on WHY I initially launched this podcast in 2021, and how that purpose has evolved over time.

I hope you enjoy this show!

I'm including a couple of links below:

Did you know your Social Security benefits in retirement could be 100% tax-free? Perhaps you didn't even know Social Security would be taxable as many of you paid into the system for decades!

Today we will unpack how Social Security retirement benefits are taxed, and most importantly how to reduce taxes on those benefits in retirement.

A few notes for the listeners:

Provisional Income / Social Security Tax Rates for 2023

Individual

• Not Taxable: Less than $25k
• Up to 50% Taxable: $25k-$34k
• Up to 85% Taxable: Over $34k

         Married Filing Jointly

• Not Taxable: Less than $32k
• Up to 50% Taxable $32k-$44k
• Up to 85% Taxable: More than $44k

A helpful Kitces.com article